Mortgage Killer Accelerator

Strategy 22 of 107

Lower the escrow: appeal the property tax, claim exemptions, use the surplus refund

Depends on people or program rulesFrom a lower cost of the same debt

What it is

Read your assessment notice line by line (square footage, rooms, condition) and compare it with similar homes. If it is too high, file an appeal by the deadline on the notice.

Steps

  1. Read your assessment notice line by line (square footage, rooms, condition) and compare it with similar homes. If it is too high, file an appeal by the deadline on the notice.
  2. Make sure every exemption you qualify for is filed: homestead, senior, disability or veteran, as your state allows.
  3. When the yearly escrow analysis shows a surplus of $50 or more, the servicer must refund it within 30 days. Send the refund to principal.
  4. Keep paying the same total; the lower escrow amount goes to principal.

Repeat: Every assessment year, and every escrow analysis.

Measure: Monthly escrow reduction plus any surplus refund (yearly amount).

Try it in the calculator Enter its amount in "Monthly non-income amount to principal". Add a payoff goal of 5 years to see what is still needed.

Risks

  • An appeal can be denied, and in some places the assessment can be raised on review.
  • Deadlines are short and differ by county.

Who it fits

Average household, Married couples, Single, Grandmas and grandpas (62 and over), No high school diploma, No college degree, Newlyweds

Needs

Any homeowner with a mortgage.

How predictable

Depends on people or program rules (tenants, family, IRS records, lenders)

A worked example (hypothetical, not guaranteed)

Picture a hypothetical household (average household). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.

They follow the steps: read your assessment notice line by line (square footage, rooms, condition) and compare it with similar homes. If it is too high, file an appeal by the deadline on the notice.

Suppose it brings $600 a month on principal from this strategy, not from the paycheck. The loan would be paid off in 16 years 3 months instead of 30 years, saving about $196,219 in interest. To finish in five years, they would still need about $3,374 a month more from other strategies. That is why the five-year sequences stack several at once.

The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.

Sequences that use it

  • Cost-cutter stack (no new debt): Every dollar comes from a bill that got smaller. The total you pay each month stays the same, and the difference lands on principal.
  • Found-money sweep: Money that is already yours: unclaimed property, old medical receipts, escrow surplus and over-withheld tax.
  • Veteran stack: A lower rate at the same payment, then a lower escrow: many states give veterans a property tax exemption to file.
  • Military family stack: While on active duty, the 6% cap at the old payment; clear costlier debts; after service, a streamline refinance before the cap ends.
  • Servicer check-up: Make sure the servicer credits every extra dollar, drop mortgage insurance on time, fix the escrow, then put idle savings to work.

Sources and more information

Where to get help

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