Escrow Accounts and Refinance

Often times your mortgage holder/bank will force you as a landlord to have an escrow account for taxes and insurance.  It is in their best interest to do this, and they will often offer you a slightly lower rate if you use an escrow account.  One thing to pay very close attention to is the size of these escrow accounts, especially after a refinance.  Often times the banks will hold too much aside for taxes and insurance, compared to what they actually need.  If you have recently challenged your tax invoice or lowered your insurance amount the bank will often not automatically adjust your escrows.  It is up to you to call the bank and adjusts these amounts or ask for a check for the overage.  Also, if you refinance a property close to the end of the year (or close to when your property tax bill is due) mistakes can be made with the payments of these taxes.  Make sure to follow up with your taxing authority and check through all closing statements to make sure invoices were not paid twice.  It is your money in those accounts, make sure they are holding the correct amounts.  Posted by LandLordStation.com