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Hi everyone,
I've been debating this back and forth so it's time for another opinion.
My escrow came up "short" (ie, it doesn't mean their minimum extra amount required that I don't even get interest for). I can't get out of it right now, it would cost me too much since apparently we got a discount on the rate (not that it was clear at the time) and we aren't planning on being here long enough to make up the difference, especially with rates so low right now.
But it's not short by too much, around $100, due to insurance increases (thanks fires!). Normally, I pay $750 a month and this covers everything plus $11 extra to the principle.... but the new bill will be like $748.xx per month to cover everything and the extra escrow. However, they have offered to let me pay a "one time" fee of around $100 and then the amount will go up less, around $742.xx.
So basically, I am still fine with my $750 payment, but what I'm asking is whether it is worth it to send them the one time $100 extra and pay another $8 a month on the principle or just pay the new amount, only $1.xx extra on the principle, and not send them the shortage for the escrow.
Rates right now are dismal (I'm at Ally so around 0.7% interest on the account) and we do have the $100 available no problems from the House Savings Fund. My mortgage rate is 5.5% and we are just over 3 years into it, planning on moving sometime after 2014 and before 15 years is up, but we aren't decided on renting versus selling yet, hence why I'm paying just a little bit more on the principle.
Any thoughts on paying the extra in one lump or spreading it out over the year?
Thanks!
I've been debating this back and forth so it's time for another opinion.
My escrow came up "short" (ie, it doesn't mean their minimum extra amount required that I don't even get interest for). I can't get out of it right now, it would cost me too much since apparently we got a discount on the rate (not that it was clear at the time) and we aren't planning on being here long enough to make up the difference, especially with rates so low right now.
But it's not short by too much, around $100, due to insurance increases (thanks fires!). Normally, I pay $750 a month and this covers everything plus $11 extra to the principle.... but the new bill will be like $748.xx per month to cover everything and the extra escrow. However, they have offered to let me pay a "one time" fee of around $100 and then the amount will go up less, around $742.xx.
So basically, I am still fine with my $750 payment, but what I'm asking is whether it is worth it to send them the one time $100 extra and pay another $8 a month on the principle or just pay the new amount, only $1.xx extra on the principle, and not send them the shortage for the escrow.
Rates right now are dismal (I'm at Ally so around 0.7% interest on the account) and we do have the $100 available no problems from the House Savings Fund. My mortgage rate is 5.5% and we are just over 3 years into it, planning on moving sometime after 2014 and before 15 years is up, but we aren't decided on renting versus selling yet, hence why I'm paying just a little bit more on the principle.
Any thoughts on paying the extra in one lump or spreading it out over the year?
Thanks!
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