Closed Escrow - Did I Handle the Process Correctly?

I recently requested and was granted a closure of the escrow account associated with my mortgage loan, so I can save (and earn interest!) and pay my taxes + insurance directly.

I believe I've handled this correctly in my budget, but would appreciate it if someone could "check my work". 

On the Account side:

  • I deposited the escrow funds into my checking account and applied it to the "Mortgage" category.

On the Budget side:

  • I moved those funds from the available amount in my "Mortgage" category into my new "Property Tax" & "Home Insurance" budget categories. 

Did I do this correctly? I don't believe I want to show these funds coming back into my budget as "income" so I didn't directly apply the funds to Inflow: TBB on the account side.

2replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
  • I would have brought it in as TBB, but reports are the only thing that are affected by this choice. I just prefer an obvious line in the sand, after which totals make sense. (That same line corresponds to when the escrow account closed.)

    As you've done it, you have "spent" less than $0 on the mortgage in July. You'll probably still be negative for another month or two. If you're OK with that, there's no reason to change anything.

    Again, you've done the most important thing (make a plan for those dollars).

      • Melissa
      • Routinely questioning every assumption I have about my budget, my spending, and my savings habits.
      • todays_mel
      • 2 mths ago
      • 2
      • Reported - view

      dakinemaui  Thank you for the feedback! I tried both the Inflow: TBB way and the "Refund" way to see how that affects things and which I preferred. But ultimately I don't want it considered as income in the reports; it was odd to see it that way - at least for how my brain wants to process this particular scenario. 

      I also want to say thanks to the YNAB community; it was on this forum that I learned escrow was not necessarily required on a mortgage loan, depending on a couple of factors. I just can't remember who specifically to credit!  All I know for sure is that until I read about it here, I believed as long as I had a mortgage payment, I'd have to have escrow included in it... 

      I'm really happy that I'll be able to save my own "escrow" money and earn some interest off of it, rather than the lender earning it for themselves on my behalf!

      Like 2
Like Follow
  • Status Answered
  • 2 mths agoLast active
  • 2Replies
  • 44Views
  • 2 Following