should i go with escrow with mtg pmt or savings?

[invisible assistant]

i'm considering forgetting putting money in escrow for taxes and insurance when we buy our house and just put money in a savings account. anyone have any opinions, tips, advice?

 

i know the obvious pros/cons... accessability, discipline, interest, etc. is there anything i'm not considering?

[54regcab]

How disciplined are you not to dip into the tax fund?

We don't escrow and could never see going back, we like having control of OUR money. No escrow screw-ups to worry about. Another thing that happens is you realize just how expensive taxes and insurance are !!!

P&I is $441 we put $159 into "tax account" to make it an even $600 house payment. We even make a little interest the ING account

Edited March 30, 2006 by 54regcab

[GEORGE]

i'm considering forgetting putting money in escrow for taxes and insurance when we buy our house and just put money in a savings account. anyone have any opinions, tips, advice?

 

i know the obvious pros/cons... accessability, discipline, interest, etc. is there anything i'm not considering?

YOU "MAY" NOT BE ALLOWED PERMISSION TO DO THAT

[54regcab]

i'm considering forgetting putting money in escrow for taxes and insurance when we buy our house and just put money in a savings account. anyone have any opinions, tips, advice?

 

i know the obvious pros/cons... accessability, discipline, interest, etc. is there anything i'm not considering?

YOU "MAY" NOT BE ALLOWED PERMISSION TO DO THAT

 

Depends LARGELY on the lender. ING doesn't even OFFER escrow, they are happy to set up a savings account for you though

[radi8]

i'm considering forgetting putting money in escrow for taxes and insurance when we buy our house and just put money in a savings account. anyone have any opinions, tips, advice?

 

i know the obvious pros/cons... accessability, discipline, interest, etc. is there anything i'm not considering?

YOU "MAY" NOT BE ALLOWED PERMISSION TO DO THAT

 

Mine requires tax and insurance to be escrowed. No choice in the matter.

But at 5.1% fixed, I'll deal with it, lol.

[GEORGE]

I HAVE ALMOST 3 TIMES THE LOAN AMOUNT IN EQUITY

 

I CAN'T DUMP INSURANCE AND TAXES FROM MY MONTHLY PAYMENT AND PAY IT MYSELF

[artglazz]

I have yet to have this option, but if I did, I would opt for no escrow

[NineCount]

One thing I didn't see mentioned as a benefit to keep your own Tax/Insurance money is the Lender could always screw this up when they come due.

 

I've heard about lenders not paying the taxes on time. Rare, but it happens.

 

There is a poster in the mortgage forum that mentioned it happened to her, she was with Ocwen.

 

I'm also with Ocwen and I paid my own taxes and insurance, didn't have escrow.

 

Just thought I'd throw that out there.....

 

-NineCount

[hogied]

Escrow is money that belongs to you and is used only to pay taxes and insurance. When you sell or refi, you get it reimbursed and you even acrue intrest on it while it's in your account.

 

Find out from your lender how much it costs to waive escrows. You'll always find a slightly higher rate for waiving them. Why pay your lender extra money to NOT have them do less for you.

 

You gotta remember that when the bank lends you money on a 1st mortgage, they intend on being in the first lien position throughout the life of the loan. ALL tax liens take 1st position which increases risk for lenders, therefore increasing rates or fees.

 

And don't worry about a lender screw up. It's their responsibility and no fault of yours. Besides, there's more risk involved for the lender to not pay than for you, so they are very good about getting these paid.

[invisible assistant]

thanks everyone for the opinions/info!

 

well, i did opt to go with no escrow. i'm putting the full amount for taxes n insurance in a savings account the day we close so it's all there a year in advance, (i know... insurance has to be paid a year in advance but that's taken care of already.) and i will be adding to savings for the year after that. heck, i might look into CDs or something. but i did check with the broker first... there is no fee for waiving escrow and there is the option (with no fee) for setting up escrow at a later date if i change my mind.

 

i'm really picky about a lot of things... paying bills is one of them. most of my bills are scheduled for payment around 2-3 weeks in advance... the ones that aren't are the ones that are auto-debited. and i have a check-off system to make sure i don't miss anything so i don't think forgetting or missing something will be a problem. taxes and insurance will be added to that list!

Edited April 6, 2006 by invisible assistant

[hhh]

Currently all of my real estate is escrowed. I didn't have a choice.

 

What sucks aobut escrow is you have NO control over the money in the account AND you still have to baby-sit it.

 

I'm a rather origanized person, so I'd perfer to do things myself, but I needed to get some deals through at a certain time and this wasn't an option with my lender (guess who has a new lender, btw.)

 

Before doing escrow, just think about this. If the lender doesn't pay your taxes or insrance because of (insert reason #67 here)... then GUESS WHO the tax authority or insurance company is going to contact for the payment. Thats right, YOU, not the lender.

 

This happened to me about 2 years ago. I started recieving letters from my insurance company saying that insurnace on 1 of my houses was about to be cancelled for nonpayment. Of course, I have no control over the situation but to put both of the parties that SHOULD be talking to each other on the phone and let them hack it out. Wasted my day. Now I get to baby-sit it on my accounts.

 

So yes, I have a sour taste with escrows and do not recommend them. Learn responsibility people.