Jump to content

Mortgage Shopping question


Recommended Posts

I'm dealing with an online mortgage broker better mortgage as well as my builder's lender.

 

The builder is charging for 2 months prepaid taxes but better mortgage has 12 months in escrow.

 

Better mortgages quote is better but I'm not understanding the difference as I always thought it was only 2 to 3 months not sure why they are showing one year.

 

They do show the initial escrow payment as 3 months but prepaids has the 1 year property taxes. The builder line is blank.

 

Builder also has builder fee, does that need to be paid by anyone I go with?

 

Lastly PMI is about $100 more with builder. They are looking now to see. Mortgage is 340k, 5% down 30 year conventional 3.125% 693 mid score

 

Thanks!

 

Sent from my SM-G960U using Tapatalk

 

 

Link to post
Share on other sites

20 hours ago, Leesa926 said:

 

I'm dealing with an online mortgage broker better mortgage as well as my builder's lender.

 

The builder is charging for 2 months prepaid taxes but better mortgage has 12 months in escrow.

 

Better mortgages quote is better but I'm not understanding the difference as I always thought it was only 2 to 3 months not sure why they are showing one year.

 

They do show the initial escrow payment as 3 months but prepaids has the 1 year property taxes. The builder line is blank.

 

Builder also has builder fee, does that need to be paid by anyone I go with?

 

Lastly PMI is about $100 more with builder. They are looking now to see. Mortgage is 340k, 5% down 30 year conventional 3.125% 693 mid score

 

Thanks!

 

Sent from my SM-G960U using Tapatalk

 

 

 

 

Without seeing the closing disclosure this is how I read it

 

Prepaid taxes can be a reimbursement to the current owner (in this case the builder) for taxes that they have already paid for the periods you'll be occupying the house.  For example if they paid through June and you take possession on April 1, you'll have to repay them for the 3 months of taxes they already paid for.  They can also make you prepay for any taxes that are going to be due in the near future (like 60-90 days).  Lastly, you will start having to escrow for your taxes, so they may require a few months of payment upfront in order to have enough in the account to pay the tax bill when it comes due.  it really depends on the timing of the closing and due date of the taxes, but in any case your broker should be able to walk you through the calculation in specific details.

 

Not sure what a builder fee is for, you can ask, but it sounds like something that they are charging you regardless of who writes the mortgage.  PMI rates can vary, so no surprise that they are different.  In any case you should be doing everything you can to pay down to 80% LTV to get rid of PMI...Lighting $100 bills would be a better use of money, at least you'll get a minute of warmth from it.

Edited by CTSoxFan
Link to post
Share on other sites

Something else to remember, since this appears to be new construction, is that the builder is likely working from a tax statement associated with land rate.  Once the taxing entity knows of the completed home, expect a substantial spike in your annual taxes.  

Link to post
Share on other sites

How many months are collected depends on your closing date, which isn't known (so it's estimated on your LE) at the time of your application.  

 

In the end you'll only pay the taxes you owe, no matter how many months they collect for the initial deposit.  

 

How many months are actually collected will be shown on your Closing Disclosure, which will be available for review prior to closing.

 

Link to post
Share on other sites
On 10/22/2021 at 4:01 AM, centex said:

Something else to remember, since this appears to be new construction, is that the builder is likely working from a tax statement associated with land rate.  Once the taxing entity knows of the completed home, expect a substantial spike in your annual taxes.  

 

This is a good point, and if your mortgage company doesn't adjust your escrow for this fact, do yourself a favor and save it yourself, as I am guessing an unplanned tax bill of a few thousand dollars would put a significant dent in your financial outlook.

 

For comparisons sake, our second year tax bill is going to be roughly 7x what the first year was on just the land.  Granted I live in an area of rapidly appreciating home values, but you can still likely expect a 4 or 5x increase.

Edited by CTSoxFan
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.




  • Member Statistics

    • Total Members
      182,996
    • Most Online
      2,046

    Newest Member
    mlette2
    Joined
×
×
  • Create New...

Important Information

Guidelines