My wife and I bought a home and we’re completely shocked when we received a month compound bill. We had 7 months in advanced collected in the escrow but we’re confused we had thought that the 7 months collected were to ease us into the month to month payment until the 7 months were completed 😂 guess turns out not. I don’t fully understand this video but I do understand it has to do with being ahead in the payment’s
Yes, they collect taxes in escrow at closing, and you continue to pay into the escrow account by paying taxes in your monthly payment. So the lender is always ready to pay the upcoming bill, and also has some funds accruing for the one after that. This means that someday if you refinance, payoff the mortgage, or sell the house, you'll be due a refund of the excess escrow account not needed at that time, since some of the escrow account is to pay for future bills that you have not incurred yet.
