Why is lender charging non homestead taxes for primary residence?

The lender goes by what the county has TODAY. Once you move into the home, and homestead the property, the county will change the designation to homestead and adjust the property taxes accordingly. AFTER that happens, the lender will adjust to whatever the new taxes show from the county.

Good Evening and Happy Holidays.I would check with a real estate attorney. There is usually one that contracts with the title co you are using. Of course if the lender picked the title co there may be some bias there. They may not wish to bite the hand that feeds them.You have enough time to change lenders if need be. If your spouse can cite Michigan law you may wish to have him copy the passages and supply the document to your loan officer who can forward it to the underwriter to get them to be reasonable. You need to get a final answer on this right away to give you enough time to find another lender. I would also mention your displeasure to the LO and let him or her know you're considering making a change if the underwriter cannot be reasonable. That may be enough to make them sit up and take notice.

Typically the lender will set your tax escrow based on what the closing attorney or title company tells them will be your actual taxes for the year. We have the same situation in SC and in other states. Talk to them to confirm the amount of your taxes and make sure the lender has that information. You have plenty of time to get that corrected. I handle loans in MI and would be pleased to provide an option if you are not fully committed to the other lender.

File for homestead after you are on title. Since the tax exemption will not be effective until the next tax year (2015-2016), the lender has no proof of the new tax base until the county tax bill is issued. You should see the correct impound on your 2016 escrow statement. If not, contact the lender at that time.