Tuesday, November 18, 2008

Step By Step Analysis
Escrow Account Review as of 04/10/2008
Step 1: Determine Base Amount Needed for the Year
Escrow Items Amount Needed Frequency in Months Monthly Amount Needed
County taxes $550.00 12 $45.83
Homeowners insurance $433.00 12 $36.08
Monthly PMI $65.67 1 $65.67
Total monthly base payment amount $147.59


Step 2: Determine Lowest Projected Balance
In the chart below, we project the amounts you will pay in to your escrow account next year and the amounts we will pay out for your insurance and tax bills. Remember, these figures are only projections and may not reflect the actual payments made at the time they are due.

Month Escrow Tax Insurance MIP/PMI Balance
Payment(s) Payment(s) Payment(s) Payment(s)
Beginning balance $356.10
$356.10-$65.67=$290.43
March 2008 $65.67 $290.43
April 2008 $65.67 $224.76
May 2008 $147.59 $65.67 $306.68
(Ta co: 147.59-65.67=81.92) 81.92+224.76=$306.68
June 2008 $147.59 $65.67 $388.60
July 2008 $147.59 $65.67 $470.52
August 2008 $147.59 $433.00 $65.67 $119.44
(Ta co: 470.52+81.92=552.44)552.44-433.00=$119.44
September 2008 $147.59 $550.00 $65.67 ($348.64)**
Ta co:119.44+81.92=201.36
550-201.36=($348.64)

October 2008 $147.59 $65.67 ($266.72)
Ta co: 348.64-81.92=($266.72)
November 2008 $147.59 $65.67 ($184.80)
December 2008 $147.59 $65.67 ($102.88)
January 2009 $147.59 $65.67 ($20.96)
Ta co: 81.92-20.96=$60.96
February 2009 $147.59 $65.67 $60.96
Ta co: 60.96+81.92=$142.88
March 2009 $147.59 $65.67 $142.88
April 2009 $147.59 $65.67 $224.80
Ending balance $224.80

Lowest Projected Balance ($348.64)
Shortage Payment Amount $29.05
(Ta co: 348.64/12 months= $29.05
**Lowest projected balance (LPB)
You, of course, have the option to pay your anticipated shortage in full.
(See Step 4 for more information)


Step 3: Determine Reserve Requirements
Federal Law allows for the collection of a reserve amount to maintain a cushion for unexpected tax and/or insurance increases and other cost. The reserve used for this period is shown below.

Lowest Projected Balance (See Step 2) ($348.64)
Total Reserve Requirement (16.6% of the annual base amount) $163.18
Additional Amounts Required $163.18
Monthly Reserve Requirement ($163.18 divided by 12) $13.60
Available Overage $0.00




Step 4: Determine Monthly Payments
Calculation of Monthly Escrow Payment
Base Amount needed for Taxes and/or Insurance (See Step 1) $147.59
Shortgage Payment (See Step 2) $29.05
Reserve Requirement (See Step 3) $13.60
Rounding Amount $0.00
Total Monthly Escrow Payment $190.24

Calculation of Monthly Home Loan Payment
Principal and Interest $622.31
Total Amount to be Paid in to Escrow Account $190.24
Total Monthly Home Loan Payment Effective 5/2008 $812.55

If you choose to pay your shortage in full, your payment will be reduced by the shortage amount of $29.05, leaving you with a payment of $783.50

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