Bank screwed us!

[Texas Proud]

Quote:

Originally Posted by Ronnieboy Interesting, I didn't realize you could over pay on your property taxes and deduct the whole amount you paid vs what you are actually billed.... Something I wouldn't mind utilizing when I get to the standard deduction phase...

I am not over paying on taxes....

Our taxes come around Nov.... it is due by the end of Jan...

So, I paid last years taxes in Jan... I will pay this years taxes in Dec... so, two taxes paid in the same year.... remember, we are cash basis taxpayers...


You can also double up on charity etc. etc....


I would not qualify for an itemized deduction if I paid everything in a single year.... always the standard deduction.... when I double up I get to itemize every other year....

[ERD50]

Quote:

Originally Posted by harley I haven't had an escrow account for a mortgage in nearly 30 years. ...

+1. It does simplify things, IMO.

A few years ago, my SIL was talking about how their property tax payments got messed up. She was talking about a "1st payment" and a "2nd payment", and I'm thinking in terms of our 1st and 2nd "installments" (the term here for the two payment during the year - I know this varies by locality) - and I just could not follow her.

Then it gets clearer - they pay by escrow, and the mortgage company (or escrow company?) messed up the payments 2 months in a row. I mention how I just find it easier to pay myself and avoid the middleman. Then she says "Oh, we didn't put enough down to qualify to pay our own taxes". They are very close in age to us. We could pay off our mortgage w/o blinking, they refinance with less than 20% down?

It's all a snowball effect of bad choices.

-ERD50

[Ronnieboy]

Quote:

Originally Posted by Texas Proud I am not over paying on taxes.... Our taxes come around Nov.... it is due by the end of Jan... So, I paid last years taxes in Jan... I will pay this years taxes in Dec... so, two taxes paid in the same year.... remember, we are cash basis taxpayers... You can also double up on charity etc. etc.... I would not qualify for an itemized deduction if I paid everything in a single year.... always the standard deduction.... when I double up I get to itemize every other year....

Ah ha,

Ours comes around Sept/Oct and is due by November, so no such luck for us

[MBAustin]

Sorry to hear about your troubles, Columbus. How aggravating!

I'm another "no escrow" person after my very first mortgage where the tax and insurance payments were messed up several times. I'm not sure how I found out you could get a no-escrow loan, but I've done it ever since, up-front fee or not. I think the last time it was a couple hundred dollars, which I think is outrageous, but I paid it anyway.

[jazz4cash]

Interesting how many ER forum members belong to the no escrow club-something I don't recall seeing in any financial advice article anywhere. I started back when GMAC was paying 10 pct on a demand note account. At today's rates, the financial gain is nil. I believe it really simplifies things if you change insurance providers mid-term like I did last year.


Sent from my iPhone using Early Retirement Forum

[pb4uski]

I haven't had escrow for a long, long time. I seem to recall way back when the escrow not paying a tax or insurance bill or some sort of screw up.

[rodi]

I had an escrow on my mortgage for my current house because it saved me .5 percent on the loan interest rate. When I refinanced, later, I got rid of the escrow. Then I got rid of the mortgage.

[athena53]

Quote:

Originally Posted by ERD50 <snip> I mention how I just find it easier to pay myself and avoid the middleman. Then she says "Oh, we didn't put enough down to qualify to pay our own taxes". They are very close in age to us. We could pay off our mortgage w/o blinking, they refinance with less than 20% down? It's all a snowball effect of bad choices. -ERD50

When I lived in NJ and put $100K down on a $350K house the bank wanted another 25 basis points if I didn't escrow. That was back when interest rates were higher and I think they wanted the float. I've been able to avoid escrowing since 2003.

[ERD50]

Quote:

Originally Posted by athena53 When I lived in NJ and put $100K down on a $350K house the bank wanted another 25 basis points if I didn't escrow. That was back when interest rates were higher and I think they wanted the float. I've been able to avoid escrowing since 2003.

I'm a little surprised at all the comments about needing to pay to avoid escrow. Maybe my memory is just poor (it is), but I don't recall having to pay to do this w/o escrow. All I recall is you had to have 20% down (also the threshold for PMI?).

But this was a long time ago, and many papers to sign at closing. And it also varies by state. While IL is really messed up in so many ways, they do get a few things right (how did that happen?)

-ERD50

[Texas Proud]

Quote:

Originally Posted by ERD50 I'm a little surprised at all the comments about needing to pay to avoid escrow. Maybe my memory is just poor (it is), but I don't recall having to pay to do this w/o escrow. All I recall is you had to have 20% down (also the threshold for PMI?). But this was a long time ago, and many papers to sign at closing. And it also varies by state. While IL is really messed up in so many ways, they do get a few things right (how did that happen?) -ERD50

If you have any of your closing stmts, go take a look.... it is kinda buried in the various fees.... I asked what the fees were for before closing as there were a bunch that I did not understand and wanted to know... it is not like they came out and told me it would cost.... I had to ask...

I never had anyone try and change the interest rate due to no escrow.... I would have gone to another broker....

[Walt34]

Quote:

Originally Posted by athena53 When I lived in NJ and put $100K down on a $350K house the bank wanted another 25 basis points if I didn't escrow. That was back when interest rates were higher and I think they wanted the float.

Maybe they had an unusually low interest rate (one does have to look at the whole package) but my first inclination would be to use that New York expression regarding pounding small particles of rock and minerals.

[athena53]

Quote:

Originally Posted by Walt34 Maybe they had an unusually low interest rate (one does have to look at the whole package) but my first inclination would be to use that New York expression regarding pounding small particles of rock and minerals.

As I remember it was market rates, no great bargain- but I was nearing the end of a messy divorce and really didn't want to apply through another broker. Six years later I sold the house at a $200K profit with little improvement (but regular maintenance), so it ended well.

[HawkeyeNFO]

With rental property #1, no escrow, simply because it allows me to have better control regarding payments of taxes and insurance. I trust myself to pay those on time, much more than I trust the bank. Perhaps more importantly, it allows me to pay them with a credit card, which is great for accumulating points/miles/rewards.

Rental property #2 was purchased using a VA loan, which mandates that escrow be used. I don't like it, but that is the VA's rule.

[Texas Proud]

Quote:

Originally Posted by HawkeyeNFO With rental property #1, no escrow, simply because it allows me to have better control regarding payments of taxes and insurance. I trust myself to pay those on time, much more than I trust the bank. Perhaps more importantly, it allows me to pay them with a credit card, which is great for accumulating points/miles/rewards. Rental property #2 was purchased using a VA loan, which mandates that escrow be used. I don't like it, but that is the VA's rule.

I am surprised you pay taxes with a CC.... here there is a 'convenience fee' that is more than the rewards, so you are in a losing position...

[HawkeyeNFO]

Rewards on the credit card are 4 or 5 percent, depending on the card. What is the loss?

[calmloki]

Quote:

Originally Posted by HawkeyeNFO Rewards on the credit card are 4 or 5 percent, depending on the card. What is the loss?

Dang - I love me some card point utilization - what cards are you using? Ink gives us 5% at office supply, phone,and internet, but I can't think of one that would give us 4-5% on a property tax payment. What's the cunning method?

[HawkeyeNFO]

Easy! Use visa gift cards. You can buy them at grocery stores or drug stores for a fee of $4.95 and the card can have a value of up to $500. My Sallie Mae MasterCard gives 5% back at grocery stores, so that's how I pay for them.

[calmloki]

Quote:

Originally Posted by HawkeyeNFO Easy! Use visa gift cards. You can buy them at grocery stores or drug stores for a fee of $4.95 and the card can have a value of up to $500. My Sallie Mae MasterCard gives 5% back at grocery stores, so that's how I pay for them.

Ok, gotcha. So $4.95 fee to buy a $500 card=1% fee, California charges a 2.3% fee to pay by card, therefore using your Sallie card to buy gift cards gives you 5%minus3.3%=1.7% for paying prop tax by card (using Cali fees..). Not bad at all...

[Texas Proud]

Quote:

Originally Posted by HawkeyeNFO Easy! Use visa gift cards. You can buy them at grocery stores or drug stores for a fee of $4.95 and the card can have a value of up to $500. My Sallie Mae MasterCard gives 5% back at grocery stores, so that's how I pay for them.

I lost my 5% back grocery card many years ago... cannot find one that still has it...

Looked at Sallie Mae now and it does not offer that now... heck, looks like you have to buy through Upromise to get 5% on anything... I am sure those prices are higher to compensate...

[calmloki]

Was fortunate to pick up a no annual fee Sallie Mae before they closed it - 5% back on the first $250 in gas, $250 in food, $750 in bookstore purchases. Eh. except Amazon codes as a bookstore! (EDIT - those are monthly amounts)

Using a 5% back Chase Ink Cash at Staples or some other office supply might work - dunno about their gift card selection. I did do this trick once to meet a required spend on an Ink card, but think I only found $100 cards and it was a royal PITA punching in all the different numbers to pay off a big apartment water bill via the phone.