Got a nice surprise last week when paying my mortgage to find that it had increased a whopping $500 per month due to an escrow shortage. This is going to severely impact my ability to maintain my wine fridge and car leasing habits, but I digress.

Long story short: in 2016 we purchased our home from an elderly woman who was receiving tax breaks due to being incredibly old. We anticipated our taxes would increase, of course, but have since learned of the severe escrow shortage. Since the whole concept of escrowing is already a shady practice in the first place, I'm willing to accept that this is just how it is and we'll have to bite the bullet.

Question: is there any benefit to paying the shortage upfront or paying it monthly?

Depends on how much cash you have and what you are doing with it I suppose. Big picture I think you could pay the new monthly payment but protest your taxes this year and hope it works out soon.

_________________
Elections have consequences.

No benefit other than peace of mind that it's prepaid.

I would have thought that someone would have given you a more accurate heads up on how much losing the senior exemptions on your home

_________________
There are only two examples of infinity: The universe and human stupidity and I'm not sure about the universe.

interesting. we recently had an escrow overage. our mortgage changed from Citi to Mr. Cooper and apparently Citi was holding too much escrow. anyway, we got a nice check and our monthly dropped $80 a month.

_________________
@audioidkid

Protesting your taxes now seems risky so soon after a recent purchase unless you got a great deal or it was a distressed sale. I'd check and see what it's assessed value now is first

_________________
There are only two examples of infinity: The universe and human stupidity and I'm not sure about the universe.

This was another option we were considering. We're in the middle of remodeling most of the home, which we originally purchased at a great price for the area.

As far as appealing, we wouldn't be able to do so until August 2018 anyway. However, literally everyone I've spoken to in my town has appealed since it seems the area was grossly overestimated. I bet any town probably says that, though.

Keep in mind, that could also have an impact on your taxes (i.e., if you finish an unfinished basement or build any additions, you are technically supposed to report those to the assessor).

_________________

True, although we haven't done anything that fancy. Refinish hardwood floors, knock down a couple walls, install three more wine fridges.

We just purchased a home under the same circumstances. One of two things should have happened,

They gave you the money upfront to pay the tax shortfall.

The money was deducted from your original down payment amount because the seller gave you the money at closing.

So...since they didn't give you a check, go back and look at your closing papers. If neither thing happened, then call your lawyer.

We had $8800.00 less to come up with at closing since they paid the shortfall upfront. I will be making our first mortgage payment today and will be sending a seperate payment strictly to cover most of the tax shortfall which we took at closing.

_________________

I seem to recognize...your house

_________________

i just want to scream...hello!

_________________

After further review everything seems to have been done correctly. The timing of when we moved in and the old lady moved out (within the tax year) caused things to get messy. Paying everything in arrears (hey-o) continues to confuse me when it comes to real estate taxes, and moving into a new place mid-year that had been receiving a tax credit previously caused the shortage.

Fuck.

Your lawyer should have explained this to you.

_________________

We got a sweetheart deal on our house and our lawyer managed to appeal our prop taxes down to meet our purchase price, rather than the assessed value. Flash forward a few years and a re-assessment has now taken place. Our taxes went up A LOT (almost doubled). It wasn't unexpected, but at least we got three sweet years of being under-taxed!

_________________

I've always just paid my own property taxes. I set up a savings account as soon as my offer got accepted and I auto-transfer in a certain amount on the 17th of each month as I get paid 15th/31st. When I get my property tax bill at the end of April, I set up transfers out for 5/15 and 8/15 and pay the taxes a few days later at the county website. Then I adjust my monthly transfer so that I am transferring 1/10 of last year's tax each month instead of 1/12 so I have contingency for any increase and some money to pay the taxes the year I eventually move out.

The whole thing takes me about 45 minutes a year, and most of that is because you can't just leave your routing information on file with the Chase web site which does the payment processing for DuPage County.

_________________
"When people want their version of the truth, they go find it, no matter how baseless their beliefs." -- Ken Rosenthal