• The Recovering Pessimist | How Escrow Works #HomeWithJoy | www.therecoveringpessimist.me | #amwriting #recoveringpessimist #optimisticpessimist #HomeWithJoy #HomeDepot #Lowes #Target #Homeowner #Homeownership #AtJoysHouse #HomeWithJoyFaves #WelcomeHome #homedecor #HomeMaintenance #Pinterest
    Home With Joy

    How Escrow Works #HomeWithJoy

    What is escrow?

    Think of escrow as a piggy bank. A portion of your monthly mortgage payment goes into your escrow account to cover payments for your real estate taxes and insurance. When your real estate taxes and insurance are due, your mortgage provider will disburse those payments from the escrow account.

    Keep in mind that real estate taxes are based on the assessed value of your home and may change based on that assessment. Your mortgage provider will perform an escrow review at least once a year to make sure there’s enough money in the escrow account to cover your taxes and insurance.

    Did you know that state and federal laws & mortgage providers require that escrow accounts hold a minimum balance?

    The required balance, tax assessment, and recent disbursements are all considered during the escrow review. If the assessment reflects a surplus (more money in the escrow account than you need), your mortgage provider will notify you if a refund is due.

    If the assessment reflects a shortage, there are 2 options for paying the shortage:

    1. Pay the shortage in full.
    2. Spread the shortage over 12 months, which would increase the monthly mortgage payment.

    Sidenote: You can pad your escrow account throughout the year by making monthly escrow-only payments. I take the amount of my last escrow shortage and divide it by 12. That’s the minimum amount I put into my escrow account each month.

    I hope this provides some clarity regarding escrow. If you have any questions, let me know. I’ll try my best to answer them.

    Until next time,

    Joy

     

  • The Complexities of Life

    Grade School Memories

    I am forever grateful to have been in grade school at a time where teachers taught students life skills versus curriculum based on standardized tests. My favorite grades in school were second and fifth. I can recall two lessons that have a profound effect on me as an adult.

    In second grade (circa 1989), my teacher spoke about common sense. I can’t remember her entire speech about common sense, but there were two sentences that stuck with me:

    [bctt tweet=”Common sense cannot be taught. You either have it or you don’t. ” username=”MsWalton”]

    As an adult, I never realized how many folks have no common sense. All the book sense in the world, but couldn’t chew gum and walk to save their lives. Baffles the hell outta me.

    In fifth grade (circa 1992), my teacher taught my class how to complete IRS form 1040EZ. For someone who hates math, this was a fun math lesson. I learned the importance of independence. My teacher explained that if you don’t learn how to do your own taxes, how will you know that someone else would do them correctly for you? Makes sense right?  I refuse to pay someone to do something I can do myself.

    I’m so appreciative to all the educators who taught me life lessons that have carried into adulthood. Now that I’ve finished this post, I’m going to finish unclogging the dishwasher.

    Until next time,

    MsWalton

     

    Updated September 3, 2016

  • The Complexities of Life

    Stupid Tax

    Tax
    Tax (Photo credit: 401(K) 2013)

    Those who are “less than intelligent” should be taxed for having to exist with the rest of us. I would call it a stupid tax, but someone would find that offensive insert eye roll here.

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