June 16, 2024
Loans

What Is An Escrow Waiver?


What To Consider Before Waiving Escrow

While an escrow waiver may sound enticing, there are drawbacks homeowners should consider first. Here are the biggest pros and cons of waiving escrow.

Pros

Most borrowers choose to waive their escrow accounts so they’ll have more control over their finances. Since you’re saving the funds yourself, you’ll have the ability to earn interest on anything you save. In comparison, you won’t earn any interest on the money in your escrow account.

Waiving your escrow requirements will also cause your monthly mortgage payments to decrease. And if you apply for an escrow waiver when buying a home, it can help you reduce your closing costs.

Cons

An escrow waiver could be the right choice for some borrowers. But you’ll be putting yourself in a difficult financial situation if you waive escrow and aren’t prepared to pay your property taxes and homeowners insurance annually.

If you’re considering an escrow waiver, it’s a good idea to review your property taxes first. And you should honestly consider whether you’re up to the task of managing the payments on your own. Most borrowers will find that it’s easier to let their lender manage their taxes and insurance for them.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent. View more
Accept
Decline