payment – One Dollar Allowance

Service Fees

November 9, 2023October 20, 2023mrsonedollarallowanceLeave a comment

I truly wonder if everyone knows they can pay their bills without paying fees. It really bugs me when there are no ways to pay your bill online without a fee. I don’t like that so many people probably pay it, accepting the fee as necessary instead of finding another way. For the sake of this information, I’m assuming you can hold a basic checking account, financially.

What started this post is my sewer bill. Every month, I receive an email from the city government. If I click “pay invoice” in their email, it brings me to a screen that shows there’s a $1.95 fee for paying, even with a checking account and not a credit card. From that screen, I can’t log into my account. However, if I go back to the email, click their “customer portal” link, then I can log in and pay with a linked checking account for $0 in fees. I put effort into figuring out the account set up here. Had I not, I would have thought they required a fee to pay online and set up a bill pay in my bank account. However, I don’t like paying by sending a check, because it sits outstanding for an unknown period of time until it’s cashed and processed; I prefer the option where it is pulled directly from my checking out immediately so I don’t have to keep track of outstanding checks.

With that, I wanted to share some things I’ve experienced and how I make sure it doesn’t cost me anything additional (unless it’s financially beneficial) to pay my bills.

PAYMENT OPTIONS

There are usually several options to pay a bill. These may include electronic payments via your bank account being linked, credit card payments, in person transactions using cash or check, or mailing the payment with a check. Processing payments costs a business money. It can cost them from a third party provider or by having staff to manually process transactions.

Most placed provide an electronic payment option these days, where you can without the use of a credit card. While I’ve seen an uptick in the number of places allowing payment via PayPal, I’m referring to ACH and EFT transactions. The automated clearinghouse (ACH) is a nationwide network that depository institutions send each other batches of electronic credit and debit transfers. The electronic fund transfer (EFT) is used to move money from one account to another electronically. EFT is an umbrella term for all digital transactions, whereas ACH only refers to transactions used through the automated clearinghouse. In many cases, payments made via ACH or EFT don’t have transaction fees, but some do.

An ACH/EFT payment requires you to provide your bank account number and your bank’s routing number. The company you’re paying is able to draw funds out of your account through this system. Having your bank account information tied to a company makes it vulnerable to data leaks and could cause some people concern. There’s also generally less protections for money drawn directly via your bank account than the type of fraud protection you receive through a credit card.

In general, processing a payment via ACH is cheaper than via a credit card. ACH payments have a flat fee per transaction, whereas a credit card company generally charges a percentage of each transaction. For a $100 transaction, it could cost a company $1 to process via ACH, or if could cost $3 to process via credit. That $2 difference can add up quickly to the bottom line.

There are some instances where you’re charged for sending a check. Honestly, this makes sense to me. The company needs to pay someone to physically receive your check, process the payment, and apply it to your account. The service fee for everything being processed electronically is the surprising one to me. Our city government requires you to add $2 to your car registration payment sent via check/mail. You can pay in person for no additional cost (without the $2 fee). When we lived in a small town in central Kentucky, I would just go to city hall, park for free, wait for a few minutes, and pay via check in person. From leaving my house to getting home, the entire transaction took about 15-20 minutes of my time. Now we live in a bigger city. It’s a 25 minutes drive downtown, parking was $1.75, and there was a long line. The ~90 minutes of my time and having to pay to park in a parking garage were not worth the $2 savings, so now I pay via mail with that convenience fee added to my bill.

Our pediatrician doesn’t have an online portal at all. This is surprising to me because 1) it’s 2023, and 2) it’s a gigantic practice. They provide an option to pay using a credit card over the phone or in person, but it comes with a 3.99% processing fee. There are usually credit card processing fees, but what gets me here is that I can’t pay via a draw from my checking account through a portal. I have to send a check or pay in person with cash or check. One time I paid with cash, and they were confused that I wanted a receipt for it. Since physical checks cost me money to have in my possession, I retain these for when I have no other option. I use my checking account bill pay to send a check. Without fail, I need to be in their office between the time they send the statement and they process the check, meaning I’m hounded to pay the balance. No. The check is on the way. They also take at least 4 days from receipt of check to credit my account. OK, I’ve digressed into a rant again.

CHECKS, CHECKING ACCOUNTS, BILL PAY OPTIONS

Most checking accounts at major financial institutions offer a bill pay system. This is a free service as part of your checking account. You set up a “payee.” This is where you enter the company or person’s name, the address a payment will be sent to, and a phone number for the payee in case there’s an issue with the payment. Your bank sends a physical check to the payee on your behalf (which also saves you postage!). When you need to send a payment, you select the date you want the check to arrive. Since a physical check is sent, it sits outstanding until it’s cashed by the payee.

If you have an account number, there’s also an option that may be available for ACH payments. I have a few payees set up where no physical check is mailed, and my bank processes the payment via the ACH, which I like because the payment is immediate for the day I schedule it.

There are two main benefits of this service. First, there’s a financial benefit. The bank sends the check on your behalf, meaning you don’t have to have an envelope and postage to send it, nor do you have to keep physical checks on hand (we opened a checking account a few years ago, and they charged $17 to have checks for the account). Second, it provides a guarantee. If for some reason the check is not received, there are stipulations that may allow your bank to cover any late fees or similar fees incurred due to a lack of timely payment. I had sent a very large check to a company. Weeks later, it hadn’t been cashed. I went to the bank to discuss, and they issued a stop payment and reissued the check. In this case, there weren’t any fees incurred on my account for late payment, and the company was understanding. My bank also noted that based on the amount, it was flagged for review, and during that review, it may not have actually been sent/processed for payment. I appreciated that I had the paper trail through the process to show what I had done, rather than no receipt or proof of attempted payment if I were to put a paper check in the mail.

CREDIT CARD PAYMENTS

Some companies may embed their credit card service fees within their prices. For example, if you buy something at Kohl’s, there isn’t a “credit processing fee” line item on your receipt. Most large companies prefer the guarantee a credit card provides for payment. When a credit card is swiped, the approval (or denial) is immediate. Accepting a check carries a risk. The company has to process the check after the fact, and if there’s insufficient funds to draw on in that account, they incur a fee for that attempt. So they’re charged a fee and don’t get the payment.

I’ve tried to pay a few people via credit card, so I ask what their fee is. Someone offered to accept a credit card if I split the fee with him. Well, I get 2% rewards on my credit card, so any fee less than 2% would still yield me a positive result. That was a special circumstance though where it was a large payment that needed to be made quickly (e.g., not trusting mail/check).

SUMMARY

Be aware of your options. There may only be a “free” option to pay in person for some (few) companies, but do your due diligence to ensure you’re not being overcharged for simply paying your bills.

I’m going to preach over and over again to pay your bills on time, minimizing interest payments on balances, and without processing fees, all the while knowing your checking account balance and outstanding payments.

House 2 Turnover & Flooding

August 3, 2023August 1, 2023mrsonedollarallowanceLeave a comment

This is long; I understand. It’s a detail account of our experience dealing with a catastrophic event and navigating the insurance process and tenants.

Over the winter, I received a call from one of my tenants letting me know that water was pouring out of the house next door (that’s also ours). The tenants had turned off the heat… when it was 6 degrees for 3 days straight. The water heater is in the attic and a pipe cracked during the freeze. When it started to thaw, the constant water running filled up the house. Our property manager went to the house and found two inches of water throughout the entire house, along with a collapsed ceiling in the master bathroom. Over the next two days, the ceiling in the adjacent laundry room and the master bedroom also collapsed.

We took immediate action on the water remediation process. The clean up company had to put several fans throughout the house and crawl space after sucking out the standing water. The next step was to purge the damaged drywall, insulation, cabinetry, flooring, etc. However, the tenant was in our way.

TENANT ACTION

The tenant’s renters insurance was responsible for removing their belongings. They created quite the speed bump, and the tenant’s items weren’t removed for 5 weeks. FIVE! The insurance company [supposedly] was requiring the use of a specific moving and storage company, who had no availability. Eventually, the tenant had the insurance company agree to them removing their own belongings to begin moving forward. They finally got their belongings out a week or so after that process started.

When we started going through the process of remediation, the tenant asked to speak with us over their concerns regarding mold. We refused because we have a property manager, and the relationship is between her and the tenant. We asked them to write us an email expressing their concerns, and we’d respond to that. They didn’t write the email. We told the property manager to relay the message that we want the house restored back to the condition (or better) that we kept the house in, and we have no expertise in this area, which is why we hired a remediation company to handle it, and I’m to trust that they do their jobs correctly to dry out the house. After that message, they didn’t push any further on the subject.

There was a nuance in the lease that if there was a catastrophic event, the tenant could choose to be let go from the lease agreement with 14 days; after that timeframe, they’re still considered responsible for the lease. The tenant read this and wrote us an email to enact it about 6 weeks after the event. Technically, we could have held them to their responsibility. However, there wouldn’t have been anything good to come from that. The tenant went from being understanding to quickly being nasty and unreasonable; it was best to cut ties.

We had told them not to turn off any electric (they were worried that water and electric don’t mix, so they shouldn’t keep the electric on; we shared that we need the house kept a reasonable temperature, so that’s not the right answer). However, they did turn off the electric shortly after that conversation. They ended up not getting their security deposit back to cover the utilities incurred and lost rent for their lack of payment through their notice. We also charged them for leaving the refrigerator in poor condition and us needing to get extra cleaning for that (which didn’t work and we ended up needing to replace it, but that wasn’t within enough time for us to know before the security deposit notification was due).

REMEDIATION CONTRACTOR

We hired a company to come out and dry out the space right away. I don’t know the details of this process because I trusted the company to know what needed to happen. They sucked up the water and put big fans throughout the house and crawl space to dry everything out. Their process was at least a week long.

They submitted their bill and dry logs to the insurance company for about $22k. The insurance company rejected their process and everything they did, and they agreed to pay out about $16k. The contractor balked at it, but we said we didn’t know how to help, and he had to speak to the insurance agent himself. They went back and forth for weeks. The contractor submitted a new invoice for $25k (why more than what it was originally?!). The insurance company eventually agreed to their $22k figure.

I tried to pay him in July for work done in January (that’s how long it took!). My bill pay system flagged the check because of the amount, but never told me. They claim it was quickly released and delivered as expected and on time, but the company never received it. I had my bank place a stop payment on it. Then I went to the bank to get a cashier’s check and mailed that to the company. That was 3 weeks ago, so I’m assuming he got the check since I haven’t heard from him.

REBUILD CONTRACTOR

We received three quotes for cleaning out the damage and rebuilding those parts of the house. None of the quotes were close to what the insurance adjuster gave us as an estimate. One of the three companies that gave us a quote asked to speak to our insurance company. They went through all the line items, and the insurance adjuster agreed to the contractor’s price for the work, which was about a $6k difference.

The initial contract with this company required 50% of the estimate up front. However, we didn’t feel comfortable handing over $25k. I spoke to the contractor, and he agreed to three payments. Their first payment was allowed via credit card, so we were able to capture $340 worth of credit card rewards on that $17,000 purchase. The second $17,000 was due upon flooring completion, and it had to be paid via check. The final amount was due upon substantial completion.

I spoke to the contractor about the vinyl floor in the bathrooms, and he actually said they’d be willing to lay the luxury vinyl plank for the rest of the house through the bathrooms also. While I’m sure it cost them less to handle such a change, it was nice that he didn’t charge us for a contract adjustment.

Once the contract was executed, we had to pick out all the replacement things. This sounded overwhelming, but it was pretty straight forward! I only had to tell him the paint color I wanted, and then pick out the cabinets and flooring. I went with a white cabinet for the lowers in the kitchen and the bathrooms. The upper cabinets in the kitchen are a brown, but I wanted to “upgrade” where I could instead of trying to match the existing. I figure eventually the upgrades will come if we ever want to sell, so I may as well do it nicely now and only have to change a few things down the road.

There were a few more selections during the process – little things like knobs and light fixtures. Again, I chose nice light fixtures, even if they didn’t match the brass that was already in the house.

There were some hiccups along the way. They painted the house the wrong color. I specifically discussed changing the color from the what was there since the whole house was being painted. The original house was built with brown carpet and yellow walls. We kept it the same color all along because we didn’t want to go through the effort of changing it (cutting in, two coats, etc.). This was our chance to change it to the color we’re using on our houses to make it more consistent. With a grayish floor, it worked better to have a light green than a yellow anyway. They also threw away our bathroom vanity counter tops, so they had to replace those at no charge to us because they were supposed to be salvaged.

All in all, everything went well with the contractors.

OTHER REPAIR WORK

Our previous tenant had burned the kitchen countertop. We decided to just keep the burnt counter and re-rent it for the time being (we didn’t have a good amount of time to add another contractor into the mess we were cleaning up at that time). Well, with the bottom cabinets needing to be replaced, here was an opportunity to replace the counter. I asked the rebuild contractor what he could charge. He was going to charge over $2k to replace the two bathroom counters and the kitchen counter.

He made the mistake of giving me the link to the countertop he would use for the bathrooms. It was $119. He charged $221.50. He also had a labor charge, plus a 10% charge for overhead, plus a 10% charge for profit. Once I saw all those details, I was put off. We said we’d just keep the bathroom counters and sinks – they were cultured marble, so they were fine, just more yellow than white. Then his guys ended up throwing away our counters by accident, and we ended up getting new bathroom countertops and sinks anyway for no charge to us.

We asked our handyman if he could do kitchen counters. He was able to get the new countertop installed and the sink set for under $500.

INSURANCE COMPANY

Our insurance company was actually really difficult to work with. They were willing to hand out money, but they weren’t there to communicate. Several voicemails and emails were left unanswered. Sometimes we’d get a random email that would say “I put a check in the mail,” but mostly, we just kept making phone calls that went nowhere.

Depreciation

As someone who worked in finance, the term depreciation makes no sense to me. The insurance company kept about $6k of our total amount they agreed to pay on the estimate. Once all the work was completed, we provided receipts of the work, and they paid out the rest of the estimate.

Because we had the rebuild contractor not do some of the activities from the original estimate (the washer and dryer were thrown away, so they weren’t hooked back up), or we had our handyman handle some of the items because they weren’t getting done (hooking up the dishwasher), the final estimate was lower than the original amount. Then I included the invoice from our handyman for the work that he accomplished. The total between these two invoices ended up being more than the original estimate from the rebuild contractor, which I expected was our loss, but the insurance company actually paid out on it.

Lost Rent

The insurance policy covered the lost rent for our vacancy. They took our lease agreement, determined the per diem amount, and then agreed to cover until the work was completed. There was a disagreement on when the work would be completed (they took a date off some paperwork that we had never seen, while we were told by the rebuild contractor that he’d be done by April 20th). Once we got that sorted, they sent us a check to cover all of March and most of April. We were able to get the house rented at the end of April, so it was only truly considered vacant for 3 days of the year, which I find impressive.

Utilities

The tenant turned off the electricity about a week after the incident (although we told him not to). Luckily, I have a program set up where the utilities aren’t actually ever turned off, but they’re reverted back to my name. We submitted receipts to the insurance company, who agreed to pay the excess amount of charges due to the house being open to the elements (missing ceiling and insulation). Their calculation was based on an average of bill total. Mr. ODA is a math wizard and didn’t accept that. He performed a calculation that equated to an average daily use of electricity, along with separating out the bills by days (because one of the bills was half a month of normal activity and half with the house open). The insurance agent said he wasn’t going to fight us over $50, so he just sent it to us. It was an interesting statement, considering all the calculations Mr. ODA did was in the original submission, and he decided to do his own math instead of accepting what Mr. ODA had said in the original email (granted, looking back, he may have never even read the email because that was the norm).

The water was turned off at the street when the initial report of an issue came in. Once everything was dried out and we had the pipe repaired (a $350 activity caused tens of thousands of dollars worth of damage .. gosh), we needed the water turned back on. That was a horrific process with the City of Richmond that ended with me screaming at a lady on the phone in some random street in my neighborhood during a walk. In order to speak to the City, you have to wait on hold for at least an hour; you can’t schedule water to be turned on via an online account. So after waiting 90 minutes for the first time to get it scheduled and being told no one needed to be home, they showed up, no one was home, and they left. There was no notice. No phone call. No voicemail. No email. No note on the door that they were there and tried to get in touch with us. Nothing. I was livid. So I called again. I waited over an hour. Then the woman who answered was very much not helpful. The conversation went quite poorly. I yelled, she wouldn’t give me a supervisor. Horrific. I finally got a new time scheduled for days out (and their window was 8 am to 5 pm – a lot of anger for that). They unlocked whatever it was that needed to be unlocked and our contractor handled it from there because it was done so poorly in the scheduling sense.

NEW TENANT

We actually struggled to find a new tenant. We were able to list it while the final clean up was happening. We had a lot of interest, but not a lot of people qualified. A neighbor had watched the rebuild happen, and she wanted the house. She didn’t qualify. And instead of accepting that information (and we’re pretty lenient), she started threatening us for not selecting her. Our initial choice fell through – and that’s why you should always be nice. She may have been a runner up, but she squandered all opportunities because of the way she handled herself and treated us. The new tenant was able to move in at the end of April. At the time that she moved in, she had two jobs. Unfortunately, she was laid off unexpectedly in June from one of the jobs, so she has struggled to pay rent in July and August. I’m understanding, but I didn’t appreciate that we had to ask where the rest of rent was and she didn’t send the late fee. Again, I’m lenient and understanding, if you’re nice. We had another tenant say that she needed another week to pay August rent because sickness kept her out of work, and I had no problem with that and waived the late fee. She told me up front; I didn’t need to go asking questions and wait all day for a response.

The new tenant did complain upon move in that the house wasn’t clean. We knew that may be an issue. The contractor’s cleaners didn’t do a great job, but the house was generally clean. The new tenant did mention that there was just a little too much dirt from the renovation to be acceptable, so we hired a cleaner to come in and get it done. Other than that, we haven’t had any maintenance requests or complaints from her.

For how big of an issue this was, I’m impressed by how easy it felt to come out the other side. We were lucky to have insurance cover lost rent and expenses, and they didn’t give us a hard time on nearly anything (we’re currently trying to manage a claim on our own how that is far from easy). We were able to re-rent the house for $150 more than it had been rented at. So while we had the house vacant and being worked on for 4 months, it really wasn’t too bad.

Escrow Analysis Update

February 14, 2022mrsonedollarallowanceLeave a comment

I posted about how one of our houses updated the escrow calculation and claimed our new mortgage payment needed to be $185 more than it had been to cover an escrow shortfall. Our escrow balance was negative, so it wasn’t a surprise that the amount was increasing, but that seemed to be a drastic increase. Most of what I said was right, but I did the increasing math incorrectly. The concept was there, but not the details.

Here’s the current escrow analysis from the mortgage company. It’s similar to what I did on my own. I knew that the new escrow amount to cover just what we owe in the year is $199.25, which is the same. I knew that there would be a shortfall in May of $256.89. This next step is where I was wrong in my calculation.

I took $256.89 and divided that specific shortfall by 12 months to come up with $16.60. Instead, I needed to take that shortfall and add it to the required balance of 2 months worth of the escrow payment. Therefore, $199.25*2+$256.89=$655.39. Take that number and divide by 12 to get the monthly payment to cover the shortfall, which comes to $54.62 (rounded).

The new payment is the new base amount plus the shortfall coverage. So our payment actually increases by a total of $96.95 because our previous escrow payment was only $156.92.

House7 Escrow Analysis

February 3, 2022February 14, 2022mrsonedollarallowance2 Comments

We received a notice that our escrow needed to be increased by $185 on this account. That seemed to be a huge jump, considering this was a new account for this year (we refinances January 2021). Our taxes went up about $35 per month, so the $185 increase stood out.

Mr. ODA’s brain works best in these scenarios, and he quickly noted that the analysis double counted our tax payment (they claimed it to be paid in December 2021 and January 2022). My brain can figure it out, but I need to write down every step of the math to understand it. 🙂 Since I took the time to analyze the escrow changes, I thought I’d share it in case anyone was interested in knowing how their analysis works.

They double counted our tax payment, so the increase truly should only be $58*. As someone who needs to see the details and can’t think in the abstract when it comes to math, I ran my own escrow analysis.

First, you need to know your taxes and insurance total for the year. Take that total, and divide it by 12 to get your monthly expense. This is because your escrow additions occur monthly. For this property, our monthly cost of our taxes and insurance comes to $199.25 (green). The old escrow amount of our monthly mortgage payment was $156.92 (orange).

The ‘Escrow Needed’ column is increased each month by $199.25. The ‘Required Balance’ is double the monthly expense for our account (199.25*2). Then the difference between the ‘Escrow Needed’ and the ‘Required Balance’ is the column in blue. The escrow shortfall is determined by the greatest negative. Therefore, I took the difference for that month (May 2022) and divided it by 12, getting $16.60*.

The escrow analysis then results in an escrow increase of $199.25 (the amount needed to cover projected expenses), minus the old escrow contribution amount of $156.92, plus the shortfall amount of $16.60*, bringing the increase to $58.93 per month and making the new monthly escrow payment $215.85.

EDIT: *These numbers are not right. For a detailed edit, see this post: https://onedollarallowance.com/2022/02/14/escrow-analysis-update/.

Escrow Payments

November 5, 2021mrsonedollarallowanceLeave a comment

A theme I stick to in this blog is that you need to watch your money. I’ve talked about ways that I’ve fought to get money back where it wasn’t billed correctly (e.g., medical bills), and today’s warning is about escrows.

An escrow account, in the sense that I want to talk about it, is tied to your mortgage. Your monthly payment includes an amount that goes into a separate account held by your mortgage company, and they manage paying out your taxes and insurance on your behalf.

The benefit of an escrow is that you don’t have to manage your insurance and tax payments. You don’t have to pay out a large sum of money once (or twice) a year because you’re paying towards this account every month that will manage that billing for you. The downside is that this escrow account requires you to maintain a balance, so it’s holding your money where your money isn’t working for you. Another downside is that your money movement is less transparent, and you just expect that the payments will be made accurately. The bank basically takes on the administrative burden of paying these bills on your behalf, in exchange for continually holding this money without paying you interest.

Each month your mortgage payment includes principal, interest, and escrow. For example, I have a mortgage payment that is $615.34. The P&I total will remain the same amount each month, but the principal portion of each payment will slowly increase while the interest slowly decreases. In my example, the total P&I is always $428.11, but the breakdown of what’s principal and what’s interest changes (e.g., October’s payment due included principal of $119.58 and interest of $308.53; November’s was $120.03 of principal and $308.08 of interest). The escrow amount each month for this mortgage is now $187.23; this number stays the same until there’s an escrow re-analysis.

An escrow analysis is conducted once per year to verify that the escrow account will have sufficient funds to pay out the bills received (typically taxes and insurance), while maintaining the required minimum balance. Sometimes the increase is known ahead of time because you can see that the estimates for the initial escrow contributions were off (or in our case, new construction uses estimates based on last year’s tax payment, which only included land value and not the final sale of the home, so we know there will be an escrow shortfall in our future). A shortfall may also occur when there’s been a drastic change in your property value assessment, causing taxes to increase more than an expected amount (like in 2021!), or when insurance costs change more than projected.

Below is an escrow analysis of one of our accounts. The highlighted row shows that when our taxes are paid, the balance will fall below the required minimum. The document says that the minimum “is determined by the Real Estate Settlement Procedures Act (RESPA), your mortgage contract, or state law. Your minimum balance may include up to 2 months cushion of escrow payments to cover increases in your taxes and insurance.” If you are projected to dip below the required minimum, they’ll offer you the opportunity to make a one-time contribution to the escrow account or your monthly payment will increase to cover that projected shortfall.

The increase is calculated in the image below. My payment to escrow at the time of this analysis was $126.18. They take my insurance and taxes owed, divide by 12, and come up with my monthly base escrow payment ($149.81). At the lowest point in my escrow balance (highlighted in yellow above), the account will be -149.43. The difference between this balance and the required balance of $299.62 is $449.05. Divide this number by 12 to get the $37.42 in the image below indicating the monthly shortage for the account.

The new escrow payment is added to my P&I payment (which stays the same), and this is my new monthly mortgage payment.

An escrow analysis showing that we’ll fall below the balance required inevitably means that my monthly cash flow will decrease (because we always opt for the change in monthly payment instead of a one-time contribution). As taxes and insurance increase, so does your requirement to fund your escrow account. While the reason for the escrow increase is to cover the taxes and insurance, which I would have to pay anyway, the escrow increase is higher because of the required minimums. One of our houses started with $766.96 as the monthly payment, and it is now $802.96 due to the escrow analysis. Another one started at $477.77, and it’s now at $537.60.

SO WHAT HAPPENED?

Honestly, the only way I’ve checked my escrow balances in the past is at the end of the year when I’m verifying the insurance and tax payments “make sense.” I’m not even verifying the details behind the numbers, just that it was similar to last year’s amount as I update my spreadsheet. Well this time, I logged in to update my spreadsheets with the new mortgage balances for the October Financial Update, and I saw my escrow account was negative by over $1000! That makes no sense because these accounts are reviewed annually through an escrow re-analysis to ensure you’re not projected to dip below their required minimum balance, and if it were to be negative, it would only be by a much smaller amount.

We had recently changed our insurance. Usually when we change insurance providers, we pay the current year on our credit card (to get those points!), and then all future billing goes to our escrow account. I don’t know why we didn’t do it this way for the most recent change, but I’m inclined to blame the fact that the process took months to get new insurance because this company hasn’t been responsive, so we just wanted it done and weren’t thinking. Since we didn’t get the new policy issued before our old policy was billed, both insurances were paid out by our escrow. Sure, that should have affected our escrow balances, but still not by $1000.

One house had a policy that cost $573.31 and the other had a policy that cost $750.06. The new policy includes both houses under one policy (this becomes annoying and it makes me uncomfortable for reasons I can’t seem to articulate to the agent) and costs $1,180.87. Each mortgage escrow paid out the original policy amounts since we didn’t execute the new policies timely. After these were paid out, the mortgage company received a bill for $1,180.87. For reasons I can’t quite figure out, the company paid $1042 from each of our escrow accounts, and then one escrow account paid $138.87 (which is the balance of 1180.87-1042). The $138.87 covers the policy fees; so someone realized that there was a separate line item for policy fees, but didn’t realize that the $1042 should have been split between two houses (even though they knew there were two houses because they took from both escrows).

I questioned the process with the new insurance company, but he didn’t take responsibility for it. He claimed that the mortgagee had to know to split it and they don’t manage any of that. I explained that I’ve had multiple houses insured by one company and have never been given one policy number for it. He acted surprised. My gut says this is wrong and isn’t going to work, both for future billing and the possibility of a need for a claim. We did receive a check in the mail for $903.13 (the difference of $1042-138.87), but we still have paid the $138.87 and want it reimbursed. I sent an email this morning explaining again that I’ve confirmed with my mortgage company that this insurance company was paid $1042+$1042+$138.87. He again responded that the $138.87 is the fees portion of the bill, and I again said that I know, but it’s been paid twice, and I’d like it back. So now I’ll stay on top of that $138.87 to make sure we get it back.

You need to fight for yourself. You need to know what companies are owed and know what you’ve paid. Then don’t back down to keep asking for an update. I recently discussed how I had to fight for medical bills (multiple times) for a year at a time to get the money reimbursed that I was owed. I even recently had to call on another medical bill that I paid before realizing it hadn’t been submitted to insurance (I would love to understand why this keeps being an issue that my medical bills aren’t submitted to my insurance before billing me). Then they submitted it to insurance and sat on my reimbursement until I called twice asking for the reimbursement (that both times they agreed I was owed and it was “in process.”). Manage your money. Especially because that $138 that I’m waiting for now could mean a big difference to a family in need or living paycheck to paycheck.