Making Ends Meet

questions & answers

Question: We refinanced our house to lower our monthly payments. The new mortgager is holding, what I feel is an excessive amount of escrow money. Are there limits or a percentage over the tax & insurance costs that they are allowed to hold?

Answer: The following is provided for general information only, and should not be construed as legal advice. To determine how the law applies to your individual situation, please consider consulting an attorney. According to the U.S. Department of Housing and Urban Development (HUD), Section 10 of the Real Estate Settlement Procedures Act (RESPA) limits the amount of money a lender can require a borrower to hold in an escrow account for the payment of taxes, insurance, etc. HUD provides a website that discusses how to estimate the amount of money that the lender is allowed to require in an escrow account.

QUESTIONS

  • We refinanced our house to lower our monthly payments. The new mortgager is holding, what I feel is an excessive amount of escrow money. Are there limits or a percentage over the tax & insurance costs that they are allowed to hold?

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