Question about closing costs for a new construction house (1 Viewer)

[Grady Wilson]

We are less than two weeks away from having our house built. I've been talking to our lender and he told me that as part of our closing costs we will have to pay for 15 months worth of escrow (the remaining three months of this year and all of next year in advance). It's been well over 10 years since we bought a house, but I don't recall having to pay for that much in escrow at closing. I could understand coming up with our insurance for the entire year in advance, but I would think our escrow payments during next year will cover property taxes that will be due at the end of next year.

Is it standard to have to come up with that much at closing for property taxes? I just don't remember having to come up with that much with our previous house.

Thanks....

 

[meatwad1]

They are hedging that you are able to pay. If something goes wrong on your end and they build the house, then they are stuck with the taxes. It is something you are going to have to pay anyway, so just suck it up.

 

[Dragons]

I don't know why a new build would be different, but we prepaid about 8 months a year and a half ago. 15 seems excessive, but what is in it for him to lie?