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Thread: Do you escrow (mortgage)?

  1. #1
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    Do you escrow (mortgage)?

    I elected to escrow taxes/home insurance when I got my mortgage last year. However, it got me thinking, that the escrow keeps a decent amount of money ~$8k for about a year.
    I am seriously thinking of stopping escrow and handling that myself. What do people typically do?

  2. #2
    Chronic Leg Day Skipper BehindBlueI's's Avatar
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    Mar 2015
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    Do you have that option? I don't believe I could opt out of escrow. Mortgages are set up to protect the lender, not the borrower, and they don't want you defaulting on taxes or not paying the insurance on the collateral for the loan.

    I could be wrong, but at least with my lender and a VA loan, escrow is mandatory.
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  3. #3
    Member TGS's Avatar
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    Apr 2011
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    Back in northern Virginia
    Escrow.

    Zero interest in not doing escrow. All I need is to get sick or otherwise incapacitated on an overseas work trip and miss a payment.

    Prior to escrow being the norm, it was common for people in my job to be paid ahead 2-3 months on their bills for this exact reason.
    "Are you ready? Okay. Let's roll."- Last words of Todd Beamer

  4. #4
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    Mar 2011
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    I do have an option to take care of taxes/insurance myself.

  5. #5
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    Feb 2012
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    Lexington, SC
    I escrow

  6. #6
    My property taxes are due quarterly so I don't see the value to holding onto the cash for a few months. Now that you can get almost 4% on a money market, I'd consider not doing escrow if I only had to pay once a year.

  7. #7
    Site Supporter LOKNLOD's Avatar
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    Feb 2011
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    If you've got the cash in liquid savings and can maintain your own escrow account...sure. I suppose the thought is that the money can be invested instead of sitting their account? I'd need a lot higher savings rate than my current to make that worth the hassle.
    --Josh
    “Formerly we suffered from crimes; now we suffer from laws.” - Tacitus.

  8. #8
    Site Supporter HeavyDuty's Avatar
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    It’s now… HAMMER TIME!
    One of the reasons we are doing a small mortgage on the new place is escrow. They hold the money but it’s still mine, and not having the hassle of tax and insurance payments is worth it to me.
    Ken

    BBI: ...”you better not forget the safe word because shit's about to get weird”...
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  9. #9
    Gucci gear, Walmart skill Darth_Uno's Avatar
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    Quote Originally Posted by BehindBlueI's View Post
    Do you have that option? I don't believe I could opt out of escrow. Mortgages are set up to protect the lender, not the borrower, and they don't want you defaulting on taxes or not paying the insurance on the collateral for the loan.

    I could be wrong, but at least with my lender and a VA loan, escrow is mandatory.
    Many VA loans have very little down payment. When the LTV gets too high, VA loan or otherwise, most lenders want you to escrow for the very reasons you said. Usually you can opt out once the LTV drops low enough (usually about 70% but that's up to individual bank policies) along with other factors (income, credit, other debt, etc). Basically once you get to a point to where the bank is comfortable that you can and will pay it yourself, and they won't be in too bad a spot if you don't.

    I pay my taxes and insurance separately, but I do have them and my mortgage set to autopay so I don't have to worry about forgetting.

  10. #10
    Abducted by Aliens Borderland's Avatar
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    Feb 2019
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    WA.
    Quote Originally Posted by Darth_Uno View Post
    Many VA loans have very little down payment. When the LTV gets too high, VA loan or otherwise, most lenders want you to escrow for the very reasons you said. Usually you can opt out once the LTV drops low enough (usually about 70% but that's up to individual bank policies) along with other factors (income, credit, other debt, etc). Basically once you get to a point to where the bank is comfortable that you can and will pay it yourself, and they won't be in too bad a spot if you don't.

    I pay my taxes and insurance separately, but I do have them and my mortgage set to autopay so I don't have to worry about forgetting.

    Ditto. We pay our taxes and insurance. It never came out of an escrow account. Ins. and taxes are auto pay. We no longer have a mortgage so it's write a check for everything or set up auto pay for when it's due.

    Most of my money is in the bank losing value while I sleep.
    In the P-F basket of deplorables.

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