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.
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).