I'll try to make this short.  As Realtors, we find ourselves getting phone calls from clients because their mortgage payment "just went up $800-$900 per month" and they cannot afford the payment.  This happens frequently when the unsuspecting buyer purchases a new construction home without representation.  The nice salesperson, who represents the builder, writes the contract and connects them to the in-house lender so they can take advantage of the incentives.  Often, the buyer barely qualifies because of debt ratios, etc....and to be fair, the house is on the tax rolls as unimproved (lower tax $) property.  For easy math, assume a tax rate of $3.50/$100 of assessed value on a $200,000 home = $7,000 annual tax.  If the buyer completes the homestead exemption, then the annual taxes would be reduced to about $6,000.  Divide $6,000 by 12 and the amount of escrow for TAXES should be $500 per month.  If the escrow is being calculated on UNIMPROVED value, then the amount might typically be $30000 lot value = $1050.  Divide $1050 by 12 and the amount is less than $100.  The title company is a neutral third party and unable to go over the consequences of "under escrowing".  Fast forward to the time tax bills are sent and there is a shortage of $400/month for 11 months...or $4400.  Now, the mortgage payment has been adjusted to include $366 for past escrow shortage and the correct escrow of $500.  In this instance, the happy new homeowners have their mortgage payment increased by $766 per month.  And that is only for taxes....we must include principal, interest and insurance to the mortgage payment.  After 12 months, the homeowner will no longer have to pay the additional $366 for the escrow shortage, but so many people are not able to make the higher payment....even for one year.  So, they call the Realtor and have to sell the house.......quickly.  That means at a reduced price and many times they are competing with new construction.....and we all know how that goes!  If the house doesn't sell and they become delinquent in their mortgage, then it becomes a foreclosure.  Let's don't let that happen.  If you or someone you know is about to buy a new construction home, be aware of this scenario.  Remember, the new home salesperson is "married" to their product,  not to the buyer.  As Realtors, we have your best interest at heart and will gladly share our knowledge and experience.......and we're "married" to our clients.....not the product.  Please feel free to call me or send an email to kathye@pearlandhomes.com for more information and suggestions about real estate....or as always, feel free to visit my website at www.PearlandHomes.com