Tax impounds have become the standard method for homeowners to pay their property taxes. Most banks prefer that you pay your taxes with your mortgage payment. Almost every mortgage company will actually charge you if you do not want to pay your property taxes with your mortgage. There is a higher risk for the mortgage company if you pay your own property taxes.

So what happens when you send your property tax payment in every month? Generally taxes are due once or twice a year. An escrow account is created to hold your property tax payments each month until they are due. This account does not make interest for the bank, it is simply a non interest bearing holding account. When the taxes become due the bank or the loan servicing company will pay them for you.

What happens when you refinance? A refinance is a bit more complicated. You will be required to pay your taxes that are coming due within generally 90 days from the day your new loan funds. You will be returned any money that was in the escrow or impound account from your previous loan. This will create the need to start a new property tax impound account. The new account will accrue so that there is enough to pay your property taxes when they become due at the next annual or semi-annual payment date. You may need to provide a couple of months to start the new impound account moving forward, but you are being returned roughly the same amount from your old escrow account.

In summary, when you refinance you will start a new escrow account. That account will need about the same amount to start as the amount that is in your current property tax escrow account. It is essentially just moving the money around. If you choose not to escrow your taxes you will be charged by the bank, although they generally will not even mention that to you. It is almost a given that homeowners will escrow both the property taxes and the homeowner’s insurance into their mortgage payment.

About the Author

Mr. Adam Ferguson

Adam Ferguson has developed an expertise in the financial services sector through education and experience. Mr. Ferguson has spent time in the sales divisions of Fortune 500 mortgage banking and insurance firms. Adam Ferguson’s broad knowledge and concise understanding of consumers is critical to making FreeHomeRefi.com the premier provider for consumer mortgage refinancing solutions. For information on refinancing online, go to www.FreeHomeRefi.com.

FHA Purchase

Real estate is an important investment opportunity that is very attractive to singles and couples looking to increase wealth and stop paying rent to a landlord. The FHA loan has become an increasingly popular way to obtain financing for homes in the United States. FHA purchase loans allow buyers to put down as little as 3% when buying a home. Home buyers can even use gift funds for the down payment.

Many borrowers are now realizing that 100% financing is virtually non-existent in the marketplace at this time. With an FHA mortgage there is no credit score requirement. This can be especially helpful for borrowers with less than favorable scores. The home buyer will have to qualify “full doc”, which means that they must be able to prove their income and employment. This can typically be done with 2 years w-2’s and a current paystub.

FHA purchase loans can even be used to purchase manufactured homes. A manufactured home purchase loan can be one of the toughest loans to obtain. There are some guideline requirements for obtaining a manufactured home loan through the FHA. These guidelines generally apply to the age of the home and the method used for securing the manufactured home to the ground (foundation, etc.).

Now you need to ask yourself the following important questions. Are you ready to buy a new home? Do you want to put down as little as possible? Is your credit score less than perfect? Can you prove your income? If you answered yes, you are likely a perfect match for an FHA home purchase loan.

About the Author

Mr. Jeremi McMaster

Jeremi McMaster has spent more than 10 years in the mortgage banking industry. Mr. McMaster has worked for some of the top lending institutions in the country while also helping build and grow smaller mortgage banking firms. Mr. McMaster and his company, FreeHomeRefi.com, are able to help homeowners looking to refinance home mortgages as well as financing their first home. Professionals with many years in the industry are continually impressed by his abilities.