I live in NJ, and my mortgage was originally with UWM but was sold to Mr. Cooper. Everything was fine until this month when my escrow was re-analyzed. My current property taxes are $8,500, but starting next February, they’re projected to increase to $10,900. I’m confused and frustrated because the new 2025 tax rate doesn’t take effect until July next year. Why would my escrow be short $650 starting in February, and why are my payments going up by about $300 starting the same month?
Mortgage servicers often estimate property taxes based on state and county rates multiplied by your home’s assessed value. Changes in tax rates or property assessments can lead to adjustments in your escrow.
@Amory
I understand how taxes are estimated, but I’m puzzled by the significant projected increase when new rates aren’t announced until July. My servicer’s explanation doesn’t align with what the tax collector has told me.
@Pierce
It’s possible the increase is due to an anticipated rise in your home’s assessed value, not just the tax rate. Has there been recent development or revaluation in your area that might affect this?
@Mika
I’ve received no such information, and communication with Mr. Cooper has been unhelpful. They claim to have sourced their data from the county tax collector, who has no record of such interaction.
@Pierce
Servicers sometimes collect more to prepare for potential shortfalls. If they over-collect, the extra funds are eventually returned to you without interest.
Did the $8,500 reflect the tax for your home’s initial value? Sometimes, new constructions are taxed on the lot value before the home is built, leading to significant increases once the property is reassessed with the building.
@Mika
Yes, it’s a new construction, but the size and valuation are consistent with other homes here. There’s been no significant change that would justify such a sharp increase.
Check if the projection is for the total annual taxes or just the anticipated balance at the time of payment. Servicers often keep a buffer in escrow to cover fluctuations.
I had a similar issue where my taxes were projected to increase, leading to higher escrow payments. It turned out to be an overestimate, and I was refunded the difference after actual taxes came in lower than expected.
@Parker
I’m planning to call Mr. Cooper to clarify this, as online discussions have been frustrating. Hopefully, it’s an overestimate that will be corrected later.
Escrow accounts can be stressful as they depend on projections that may not always be accurate. Servicers err on the side of caution to avoid shortfalls, but this can lead to temporary overcharges.