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| closing day 2011 |
Yesterday, we received a statement from Wells Fargo regarding our mortgage and escrow account. We utilize the escrow account to pay our homeowners insurance, city taxes, and the mortgage insurance. Each year, the company reviews our account and adjusts our mortgage payment accordingly. The minimum balance our escrow account can be is $701. At one point this year, we dipped to about $605 which left us with a shortage of about $95.
Wells Fargo provided us with two payment options:
Option 1: Pay the $95 up front and increase our monthly payment about $5 to make sure we don't have a shortage in the coming year -or-
Option 2: Spread the $95 dollars out over the course of the next year in addition to the $5 increase in the mortgage payment.
I chose Option 1 since the shortage wasn't an exorbitant amount of money. Our new mortgage payment starts in April; Previously, we were paying $12 extra each month on the principle to make our mortgage payment an even number (easier for transferring funds between bank accounts). After reviewing the statements and talking with the hubs, we agreed to put an extra $200 towards the principle. According to my calculations (but remember, I'm not the math teacher in the marriage), this puts us on track to have our mortgage insurance removed in about 7 years.
We're also weighing a payment plan offered by Wells Fargo that would allow us to make bi-weekly payments on the mortgage. Allegedly, this is supposed to help us pay off the principle faster. Hubs is sold on the idea, but I'm wary of another mid-month payment, since that tends to be when the majority of our bills are due. Right now, I want to keep my focus on utilizing any extra money for savings and paying down my credit cards.
Feel free to share any helpful tidbts or stories you might have about homeownership in the comments!
Day Seven Spent:
Wells Fargo: $93.18
Wawa: $2.67
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Day Seven Saved: $0.00
I went with the first option when this happen to us. The annoying thing was that we initially got a $900+ check back because they were holding way to much in escrow, but then we had to pay sonmething like $40 back in, because they gave us TOO much back. :-P
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