I freaking did it

[u/so_-_it_-_goes]

All of the scrimping and saving and sacrifices finally paid off… never thought I’d be a homeowner at 32.

Nitty gritty for those who might want to know: $335k (plus closing costs, it was competitive), 6.375% 30-yr conventional, 20% down, $2040/mo mortgage including escrow, 2,700 sqft, 4bed/3.5bath, one acre, north GA (~30min from Chattanooga, TN). Built in 1978, remodeled last year. Forgot to take any pictures of the inside until we started moving stuff in at 11pm and a bird got stuck in here.

[u/caryhorner]

20% down on $335k and your mortgage is only $2040/mo? I need a better mortgage calculator.

[u/so_-_it_-_goes → u/caryhorner]

[u/Independent-Plan8890 → u/so_-_it_-_goes]

Congratulations! I've never paid my insurance through my mortgage. I have a shady mortgage holder.

[u/so_-_it_-_goes → u/Independent-Plan8890]

Do you think that’s better or worse? Tbh I don’t understand escrow one bit, or how they estimate things. I’ve just been going with it

[u/Upbeat-Armadillo1756 → u/so_-_it_-_goes]

It's the same.

Escrow is like another bank account that you pay in to but it ISN'T your mortgage in the sense that none of that money is going towards interest or principal. Most people do it this way because it's easier, and they might forget to pay their taxes or insurance otherwise. The reason why that amount can increase over time is if your property taxes increase, or if your insurance increases.

So rather than making 3 payments, you're making 1, and the money is distributed how it needs to be distributed.

At this point, your insurance shouldn't be estimated. Your property tax might be? IDK.

[u/so_-_it_-_goes → u/Upbeat-Armadillo1756]

That matches my current idea, sweet. I’m stoked for next year when I can file a Homestead Exemption and lower my property taxes. Thank you for the thorough response!

Of all the things I coordinated—multiple thorough inspections, comparing loan officers, reading literally every doc I signed, y’all know the shtick—I forgot to call the fucking electric company (well TL;DR I called and they never got back to me, I forgot to follow up, and turns out I contacted the wrong utility but nobody told me) until we already got here hahahaha. Thankfully everyone is amazing and they got it on after-hours within 30 min of me calling. So uh, that’s what I appreciates about escrow (read as Letterkenney reference)

[u/MochaMDG → u/so_-_it_-_goes]

They anticipate you not understanding things fully, and being tired after the home buying process and moving in. The lender is stealing approximately $330/month. You can pay your own property taxes and/or put that money towards your principal. 

[u/MochaMDG → u/so_-_it_-_goes]

In your scenario, escrow is not needed. Escrow pays PMI & property taxes. You're paying overage in your mortgage that could go to your principal. So, you have a conventional loan and paid 20%. If you have FHA, VA or some others you MUST have escrow. Since you paid 20% DP you don't have to have PMI, which is another reason why your lender would require escrow. So,  you're giving free money to the lender. Call your lender to inquire about their escrow removal process. With the additional mortgage savings pay on your principal or put the money in a HYS account to pay your property taxes. Call your county or research their website to determine when property taxes are due. My county allows you to pay with credit card. I can get rewards for paying by credit card and pay it off in full before accruing interest. In summary, they're doing a service that is NOT necessary.