Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Virtually all lenders will waive the escrow requirement and you can pay directly. I would never allow my lender to escrow and keep my money for a year.

They usually charge you a higher rate to do this since the loan just became riskier.

They haven't yet.

They did when you took the loan, dimwit. You paid an eighth to a quarter point over what you might have paid if you'd let them escrow. This is how it works.

You really ought not insult people when it's apparent you have ni idea what you're talking about. If you meet the lender's requirements, you can ask to have escrow removed, and there's no charge.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Virtually all lenders will waive the escrow requirement and you can pay directly. I would never allow my lender to escrow and keep my money for a year.

They usually charge you a higher rate to do this since the loan just became riskier.

They haven't yet.

They did when you took the loan, dimwit. You paid an eighth to a quarter point over what you might have paid if you'd let them escrow. This is how it works.

No, the isn't how this works. You fully negotiate the loan and at the last minute demand to remove the escrow, or simply don't sign those documents at closing. As long as you meet the lenders criteria for now escrow (can be a combination of credit and equity, although for conforming loans there are specific Fannie requirements) they will close the loan without escrows. You don't pay any more for the this. Or you shouldn't. If you did, your mortgage broker/lender pocketed that money, it didn't go into the pool when the loans were assembled for securitization.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Virtually all lenders will waive the escrow requirement and you can pay directly. I would never allow my lender to escrow and keep my money for a year.

They usually charge you a higher rate to do this since the loan just became riskier.

They haven't yet.

They did when you took the loan, dimwit. You paid an eighth to a quarter point over what you might have paid if you'd let them escrow. This is how it works.

My taxes just went up by $1700 this year.

Anonymous wrote:

Anonymous wrote:Virtually all lenders will waive the escrow requirement and you can pay directly. I would never allow my lender to escrow and keep my money for a year.

They usually charge you a higher rate to do this since the loan just became riskier.

They haven't yet.

Anonymous wrote:This is why I don't escrow. Too much of a pain.

So it was worth it to pay a higher rate for the privilege of writing your own property tax and home insurance checks?

Anonymous wrote:Virtually all lenders will waive the escrow requirement and you can pay directly. I would never allow my lender to escrow and keep my money for a year.

They usually charge you a higher rate to do this since the loan just became riskier.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Escrow is a good idea for the vast majority of homeowners. I is convenient and ensures your tax and insurance bills get paid.

We ensure our taxes and insurance gets paid, by actually paying them. I find writing a check twice a year to pay property taxes convenient. Insurance is bundled with car and others so we get a bigger discount and they take it out automatically. I don't trust another entity to do it- there were several scandals in the late 80's and early 90' where mortgage companies neglected to pay them and/or kept way too much in escrow. I don't want the banks to get any more of my money to play.

That's great, but you aren't be vast majority of consumers. I am no fan of the banks, but it is actually quite reasonable for them to require escrow to protect their investments.

I agree.

Anonymous wrote:

Anonymous wrote:Escrow is a good idea for the vast majority of homeowners. I is convenient and ensures your tax and insurance bills get paid.

We ensure our taxes and insurance gets paid, by actually paying them. I find writing a check twice a year to pay property taxes convenient. Insurance is bundled with car and others so we get a bigger discount and they take it out automatically. I don't trust another entity to do it- there were several scandals in the late 80's and early 90' where mortgage companies neglected to pay them and/or kept way too much in escrow. I don't want the banks to get any more of my money to play.

That's great, but you aren't be vast majority of consumers. I am no fan of the banks, but it is actually quite reasonable for them to require escrow to protect their investments.

Anonymous wrote:Escrow is a good idea for the vast majority of homeowners. I is convenient and ensures your tax and insurance bills get paid.

We ensure our taxes and insurance gets paid, by actually paying them. I find writing a check twice a year to pay property taxes convenient. Insurance is bundled with car and others so we get a bigger discount and they take it out automatically. I don't trust another entity to do it- there were several scandals in the late 80's and early 90' where mortgage companies neglected to pay them and/or kept way too much in escrow. I don't want the banks to get any more of my money to play.

Anonymous wrote:

Anonymous wrote:We never have had an escrow. We initially put 20% down, so it wasn't required.

That makes no sense. Either your mortgage company pays your property taxes and homeowner's insurance or it doesn't. It has nothing to do with how much you put down.

Many mortgage companies will not let you opt out of escrow unless there is at least 20% equity in the house.

As a tangent, this question has got me once again convinced that there needs to be some financial literacy classes in school. I didn't take one until college, and I am by no means an expert, but what valuable, practical information! It was certainly helpful for this biology major
Compound interest, dollar cost averaging, how mortgages work, insurance, retirement, etc.

My parents didn't really clue us in to a lot of this, as they consider it déclassé to talk about money, but that was a huge disservice. I will be teaching my kids these things from an early age.

We settled the pro-rated amount at closing. That's not related to the escrow being short, though.

Anonymous wrote:Our escrow was very high the first 1.5 years because we bought in the fall, the initial escrow account did not have over 6 months balance, and property taxes were due Jan. So over less than 1.5 years we had to put enough in the balance to cover two years of taxes. It stabilized to 1/12 of the taxes and insurance after that.

Aren't the taxes pro-rated between the two owners or is the house just taxed and you have to settle the pro-rated amount of taxes due at closing?

Yes, generally your payment will go up year after year, as your property taxes go up (it's possible they will go down, but not as likely).

For my mortgage:

In 2005, at purchase, my property taxes were $3,314/year. Now, in 2013, they are $4,806/year.

This equals a monthly mortgage increase of $124/month

I also refinanced to a lower interest rate during this time, and since my home appraised at a much higher value than when bought, I was required to increase my homeowner's insurance. Homeowner's insurance went from $710/year to $1,600/year.

This equals an additional monthly mortgage increase of $74/month

So, in 8 years time, my mortgage escrow payment has increased $198/mo.

If you were renting, you would expect your rent to increase as time goes on, so really, I don't think it's that bad.