Comments on: To escrow or not?

By: LAL

LAL — Mon, 03 Aug 2009 15:49:07 +0000

Yes , then they charge it to you in a one time payment. Then they increase your monthly escrow fee.

By: manuel newman

manuel newman — Fri, 31 Jul 2009 14:32:58 +0000

if you do not enough money in escrow to pay your property taxes, is the mortgage company going to pay to keep the state from putting a lein on the property?

By: Carnival of Financial Learning #7 - Snow Addition | Financial Learn

Carnival of Financial Learning #7 - Snow Addition | Financial Learn — Sun, 13 Jul 2008 17:14:44 +0000

[...] presents To escrow or not? posted at LivingAlmostLarge, saying, “Should you escrow your own property taxes? What are the [...]

By: Meg

Meg — Tue, 08 Jul 2008 04:00:47 +0000

I don’t escrow my tax or insurance on my condo, and it does take discipline to make sure you “save” your taxes every month so you have enough to make payments at the end of the year.

But when I bought my first rental property they mandated it (no matter how much I put down, this particular lender had a rule all investment properties had to escrow). It’s convenient not to worry about it with my rental; one payment per month and I’m done.

However now I’m buying a new rental and my new lender isn’t mandating escrow. I have to admit I’m excited because that’s over $600 a month I can save and earn interest on.

But the main difference I notice is that not escrowing is seriously lowering my closing costs because I don’t have to pay a year of tax and ins in advance like I would if I were escrowing; instead I am on my own and can jump right into monthly payments if I want with the insurance company.

By: LivingAlmostLarge

LivingAlmostLarge — Mon, 07 Jul 2008 14:44:28 +0000

I’ve found that escrowing like I said is better on our own. But I can see why people have their mortgage companies do it. It is easier to not worry.

By: kitty

kitty — Sun, 06 Jul 2008 22:03:33 +0000

I had an escrow account on the very first condo I lived in. On the second one, I was offered a possibility to pay my own taxes, and I said yes. I liked it better – I am responsible for paying it on time and not the bank; my money can stay in the bank until it is needed. The last property, I asked specifically to pay my own taxes. They said there was a .25% fee for it, but I agreed because I really like paying my own taxes better. In both of these properties my downpayment was over 20%. Now my place is paid off, so I naturally pay my own taxes. Why pay something in advance when it isn’t necessary. I don’t remember what kind of interest they pay on escrow accounts, but I am sure they aren’t going out of their way to find better rates.

I am a bit lucky because I earn enough to cashflow the payments, so I don’t need to worry about having a specific account for it or save money in advance. I can just pay property taxes from my paycheck when I get the bill. But it seems to me that even if one has to save specifically for it, it is much better to manage one’s own “escrow” account. Depends on the individual preferences though.

By: frugal zeitgeist

frugal zeitgeist — Sat, 05 Jul 2008 01:01:13 +0000

You know, I’ve never been asked to escrow a cent. Maybe it has something to do with living in a c0-op.

By: Barb1954

Barb1954 — Fri, 04 Jul 2008 21:14:06 +0000

Our mortgage companies have always required the escrowing of property taxes and homeowners insurance, I believe, and we’ve never had problems. I always call to make sure the payments have gone out on time. Since our property taxes increase every year, the escrow account is analyzed every spring to calculate the correct amount for the next 12 months. We can either send a check to make up any shortfall in the account or make it up through increased payments during the next year. Having enough saved is never the fault of the mortgage company and its escrow policies. That blame lies squarely with our spendaholic local governments and school boards who are going to tax us out of our home one day.