worth escrowing to save $1K in refinance fees

[Anonymous]

Looking at a 30-year refinance. There's an additional $1000 in fees if we choose not to escrow property tax and home insurance. We have never escrowed these amounts, and I'd prefer not it. Any thoughts on whether escrowing is a hassle or not? Break even is 11 months with escrow and 15 months without.

[Anonymous]

I've always escrowed and it's not a big deal. They're holding on to a relatively small amount of money for a few months that they use to pay taxes and insurance. If you were really efficient about managing your money I suppose you could be investing it but you'd probably be picking a relatively low-risk investment with a low rate of return since the money has to be paid every six months for taxes and every year for insurance.

[Anonymous]

escrow. That fee is not worth it. Even if you set your taxes and insurance in a saving account until it is due, it will not make you $1000 in the near or long term future.

On a side note, my fee was $1780 and I just told them no, you can escrow.

[Anonymous]

I am fine escrowing. Some of my lenders actually paid better interest than my banks.

[Anonymous]

I've always had the escrow waived for free, but in this case if I were you I'd escrow for a year, pay them on my own, and have the new lender (once the loan is sold) stop the escrow. They would much rather not escrow than have to deal with the accounting of double-payment. The most recent loan I had (I think it was because it was my third mortgage - first two are now rentals) they wouldn't let me escrow so I switched homeowners insurance and paid taxes early, and rather than figure out the accounting nightmare I'd created they just refunded the escrow and waived going forward.

[Anonymous]

I've done it both ways - currently escrowed. Not that it's hard to track 3 payments versus 1, but it is easier to just have it escrowed. It's not like you'll be getting 7% on the money in a bank. Plus when taxes go up, the bank ends up fronting the increase until they get around to adjusting your escrow.