Do you escrow your property taxes and/or homeowner's insurance?

[puffkin]

I had an escrow account but when i refinanced i specifically asked them to not do an escrow. I set aside the money each month and pay it myself. I like to control my own money as much as possible.

Exactly our situation.

I have had 4 different escrows with 4 different banks and none of them paid interest. I like having control of my own money and not meeting their minimum balances. The little bit of interest I earn is a bonus.

 

[Muushka]

I never gave it much thought. Until about 20 years ago the bank neglected to pay the taxes and we almost got stuck paying penalties.

Since then, if they want to do business with us, we will take care of our own taxes and insurance, thank you very much.

 

[hsmamato2]

many years ago I had a bank/escrow acct. with the mortgae,it drove me NUTS b/c the amount kept changing,and sometimes it was too much at years end,or too little...I decided then to stop allowing them to keep my money for me Now I have it separate,and I keep track of what I need to save each month so I can pay my own (hefty) tax bill twice a year. And I know what the amount is,so it's no problem!

 

[DVC-Don]

We do not escrow any taxes or insurance. Just two days ago I had the pleasure of writting a $900+ check for our town/county tax. Then last October I handed over $4200+ for school taxes. Our homeowners is on a monthly account with the insurance company. Once a year I have to send proof of tax payment to the mortgage company. The insurance company sends a declarations page once a year to them also.

 

[hsmamato2]

I think it has to do with your equity in the home? whne we bought/financed this home we had more than 20% already in,so we didn't need to let them escrow.....maybe not....

 

[DawnM]

We escrow. We have over 20% equity but we were told that in order to get the lower interest rate we needed to escrow.

 

[emilymad]

We do not escrow and never plan to. We are in the process of refinancing and it is taking longer to find the right mortgage for us since we refuse to do this. We are perfectly capable of putting aside the money each month. I have known too many people that had their taxes screwed up because the mortgage company couldn't get it right.

 

[luvmy2sams]

We only escrowed insurance on our previous home. We intended to do everything ourselves, but the paperwork was screwed up at closing, and we never got around to changing it.

We don't have a mortgage on our current home, so we earn interest on the money until the last possible moment and then write those lovely checks for taxes and insurance. This was is much better.

 

[North of Mouse]

I never gave it much thought. Until about 20 years ago the bank neglected to pay the taxes and we almost got stuck paying penalties.

Since then, if they want to do business with us, we will take care of our own taxes and insurance, thank you very much.

We never had the mix up on taxes, but we heard of some who had. We paid our own taxes and insurance, so we KNEW it was paid on time with a receipt. I do think if you have less than 20% equity, some mortgage companies require the escrow. We have no mortgage now, so do, of course pay them ourselves. I never did trust the mortgage companies as every time we turned around they were selling to a new company

 

[SookieStackhouse]

Ours is, it is like required by the bank.

 

[Muushka]

Ours is, it is like required by the bank.

We had a bank that required it too. We told them forget it then. They said no problem, you can pay your own taxes and ins.

 

[Claire&TheBoys]

We have always escrowed; I never really knew that some mortgage-holders didn't require it. We have never had our property taxes paid late. In Florida, I think taxes are technically due in March or April, but you get an additional 1% discount for every month early you pay them, and our mortgage companies have always paid them as early as possible, in November, to get the maximum discount (5%, I think).

The amount of interest we'd make by not escrowing is probably laughable at today's rates. Our total property taxes - school, county and city - were just over $2000 this year, and our homeowner's insurance was about $1500. It's worth it to us to not have to bother with it!

 

[MrsPete]

When we bought our first home, our lender required that we escrow our taxes and insurance . . . but after we paid in the money each month, they didn't bother to pay the bills. Actually, it was worse than that, but I'll not go into all the details. Rotten stinking Fleet Mortgage. It was in no way a time or stress saver.

We don't have a mortgage any longer, but our bad experience with that first lender taught us two things:

1. Keep control of your own money. Pay your own bills. If something goes wrong now, I have no one to blame but myself.
2. Never borrow from a company that's not in your area; if things go wrong, being able to walk into their office is priceless. (And, by that same token, be sure they aren't going to sell your loan.)

 

[si-am]

We escrow our property taxes but pay our own home insurance.

 

[tinatark]

We haven't escrowed for a long time.

I think many people think escrowing is a requirement of their mortgage company when that isn't necessarily always the case.

 

[luvavacation]

The first home my DH and I bought, we had to escrow. When we sold that home 10 years later, we learned that the bank had a $3,000 "escrow reserve", beyond what the normal tax payments were. I believe laws have changed now and banks can't keep such a large reserve, but back in the '90's (when this took place) $3,000 was a huge sum of money to a young family - and it still is a large sum of money to just have sitting in a mortgage company's accounts! There was no interest paid on the extra escrow cushion, either.

We were fortunate enough to put down over 20% on our next home, and also our present home. Therefore, we do not escrow. I will not have a mortgage company holding on to my money, as if I am some child that won't pay my bills on time.

We do get tax refunds, even though we have the paychecks set up where you would think we would break even at the end of the year. However, living where we do, in Ridiculously High Property Tax Town of Northern IL, we always have a refund. If we didn't own our home, I do not believe we would receive a refund.

I do know, after our experience with escrow in the '90's, we won't ever have a mortgage with escrow. Heck, after our children finish college and we are sure they will not be living with us anymore, we will be moving south and downsizing, so hopefully no more mortgage!

 

[BellePrincessBelle]

We are required to escrow & we earn interest on it. I actually earned more interest on my escrow then I would have if I had t in a regular savings account. My escrow pays out 3x's a year. Twice for taxes, once for homeowners & they have never been late.

 

[FINFAN]

Nope....but I will say it stinks to have that $ in an account when filing for FAFSA

 

[leebee]

Four homes, four different states, four mortgage companies, and all required taxes and insurance paid via escrow unless we had 20% equity in our home, which was laughable in our income bracket! We've never had a problem with things being paid on-time, and we've always been in a state that paid interest on the escrow. We found it far more difficult to save that money and pay things ourselves. When we were in PA, DH's employer guaranteed our mortgage up to 20% so we didn't have to escrow. Putting that money into a savings account monthly seems like such a good idea, but... there's an oil tank to fill in the winter, car repairs to deal with, medical bills. We weren't very good at saving the money over time, and although we always managed to pay it on time, it was hard.

What I find FAR more annoying is the PMI payments. Basically, if you have less than 20% equity in your home, you pay an additional $250 or whatever per month (based on the amount you borrowed, I believe) that goes directly into the pocket of the lender. It's been explained as insurance against your possibly not paying your mortgage... the lender would at least have something. The logic escapes me. If I can't pay a $1000 mortgage, how can I possible pay $1250 for the mortgage with PMI??

FWIW, we currently have an 80%/15% mortgage, which means we don't pay PMI but do escrow taxes and insurance. Works for us.

 

[aymekae]

I don't remember even discussing whether an escrow account was optional, but then again, my DH was also my realtor, so I didn't pay attention to some of those details. In any case, our taxes and insurance are in an escrow account, and I don't believe we get interest. But it sounds like many of you have really high amounts that are being paid, whereas my total taxes and insurance is $300/month. So far, we haven't had any problems with our lender, and the $30-$50 we might get in interest each year doesn't seem worth having to pay it ourselves, so I'm not put out about it at all.