In addition, the lender may require a cushion, limited to no more than one-sixth (two months) of the total disbursements for the year.
Giangiulio, a pediatrician, became a first-time homeowner in 2005, when he left the Army. He, his wife, and their four children live in a single home in West Chester.
Over the last three years, he noticed that his lender, Wells Fargo, was increasing payments to his escrow account that seemed out of line with increases in his county and school taxes.
It was enough to raise his payments about $35 a month on what was originally a $400,000, 30-year fixed-rate mortgage at 5.875 percent.
"The straw that broke the camel's back was when I reviewed my last 'escrow disclosure statement and notice of new mortgage payment' from Wells Fargo in November," he said, "and realized that my projected escrow balance was falling below the 'allowable low point' in July 2010, due to the lump payment for my school tax that month."
The deadline for paying the tax and still getting the district's maximum 2 percent discounted rate is Aug. 31. The bottom line: If Wells Fargo paid the tax in August instead of July, the escrow balance would not fall below the low point, thus no need to raise the monthly payments.
You know how this is going to play out, but I'll tell you anyway. And you can substitute the name of any lender or mortgage servicer - the story will be the same.
Giangiulio called customer service to request shifting the payment. He was told the matter was one for the lender's tax department, which he "was not allowed to contact." Customer service would do it for him.
