Legal Question in Real Estate Law in New York

Re: Escrow

The traditional escrow is one full tax cycle, usually a calendar quarter, plus one month additional. The actual escrow is dependent upon when in the current cycle the closing occurs, whether or not the taxes for that cycle have already been paid by the seller (in which case a pro-rata rebate may be charged to reimburse for the days paid that you will own the property) and when your first payment will be paid in relation to the current or next cycle. Typically, a sufficient amount is required so that when the next payment is due, sufficient funds are on hand to pay the taxes, plus continue to have one month's reserve on hand, while considering how many mortgage/tax payments will be received by the billing/payment date for the next tax cycle. Thus, by way of illustration, if the next bill will be issed in 3 months, and you will only be making one payment before payment is due, you will be required to escrow 3 months of taxes, 2 months to be added to the payment to be received, plus the one month reserve. You might want to see if your mortgage company will allow you to pay taxes yourself, rather than though the mortgage, which some occasionally do, but you will continually have to verify that the payments are current. or they will will insist that an escrow arrangement be implemented.