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I'm in the middle of refinancing a Mortgage. The lender looked up the title and said that there's a property tax payment due in the next few weeks on the Title and they want to see a proof of payment.

The current mortgage company claims that they cannot make an early payment and they plan on making the tax payment two weeks prior to the due date, which could fall under the 30-day rate lock period.

Are there any rules/regulations that deal with this and are there any ideas on how to get around this?

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This is always the tricky part. You may find it easier to make the payment from your bank account, and then contact the current lender and tell them not to make the payment.

The stopping of an escrow account, and starting one with the new lender is always messy. Know that in the end it all works out. If a double payment is made to the government, the new lender will be able to skip a quarterly payment, and those funds will eventually be refunded.

Also don't forget to carefully account for these property tax payments when itemizing, it is easy to miss a payment or double count a payment.

This transfer of funds is one reason why I have not used an escrow account in a long time. I told my lenders I will handle the property tax and insurance payments myself.

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    Yep, ditch the escrow account if you do a good job of managing your cash. – Nathan L Apr 3 at 17:06
  • This. Escrow account is because the bank does not trust you. It is not for your benefit. Get rid of it as soon as you can (might not be easy though, it depends). – void_ptr Apr 3 at 18:12

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