Is it Wise to Remove Escrow if Bank Allows it?

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bigtex
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Is it Wise to Remove Escrow if Bank Allows it?

Post by bigtex » Tue Jun 04, 2019 2:42 pm

What do bogleheads do concerning escrow? Do you get rid of it as soon as your able to allow greater flexibility? Or do you keep it as its two less bills to keep track of (RE taxes & Home Ins.)?

SC Anteater
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by SC Anteater » Tue Jun 04, 2019 2:43 pm

bigtex wrote:
Tue Jun 04, 2019 2:42 pm
What do bogleheads do concerning escrow? Do you get rid of it as soon as your able to allow greater flexibility? Or do you keep it as its two less bills to keep track of (RE taxes & Home Ins.)?
Got rid of escrow as fast as possible. Pretty easy to keep track of 3 payments per year (2 for prop. taxes and 1 for insurance).

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Watty
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Watty » Tue Jun 04, 2019 2:45 pm

bigtex wrote:
Tue Jun 04, 2019 2:42 pm
What do bogleheads do concerning escrow? Do you get rid of it as soon as your able to allow greater flexibility? Or do you keep it as its two less bills to keep track of (RE taxes & Home Ins.)?
Get rid of it.

It is not uncommon for lenders to make mistakes with the payments and not pay the bills on time so then you are stuck in the middle with trying to get it fixed.

Jack FFR1846
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Jack FFR1846 » Tue Jun 04, 2019 2:46 pm

Never had escrow, never wanted it. I see no advantage to handing someone my money in order for them to screw up a payment. I'll pay myself, thank you very much.
Bogle: Smart Beta is stupid

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bigtex
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by bigtex » Tue Jun 04, 2019 2:49 pm

Okay good thats what I thought the bogleheads would say. I've requested that it be removed. I meet all the requirements according to my lender.

Ed_Sandwich
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Ed_Sandwich » Tue Jun 04, 2019 2:49 pm

As someone who has always had escrow (homeowner for only 4 years) this is interesting to me. Is the only advantage just having more control?

Quirkz
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Quirkz » Tue Jun 04, 2019 2:57 pm

Yeah, control is most of it, but that can count for a lot. I've had a lender sell my loan just before insurance was due, so they didn't pay it, but the recipient also didn't think they needed to pay it for a while, and then demanded more be put into escrow to compensate for their mistake, and it was a mess. Annual fluctuations in tax and insurance also trigger annual fluctuations in what ought to be a regular amount on the bill. And my lender (and I've heard some other stories) also seemed to be bad about making the proper calculation, and would either demand too much or demand not enough and then panic when escrow fell short. I'd rather pay my own bills than watch someone else flail around in slow motion, managing them poorly for years on end.

Get rid of it, but then mark your calendar with the payment dates, because you don't want to forget them!

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One Ping
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by One Ping » Tue Jun 04, 2019 2:59 pm

Watty wrote:
Tue Jun 04, 2019 2:45 pm
bigtex wrote:
Tue Jun 04, 2019 2:42 pm
What do bogleheads do concerning escrow? Do you get rid of it as soon as your able to allow greater flexibility? Or do you keep it as its two less bills to keep track of (RE taxes & Home Ins.)?
Get rid of it.

It is not uncommon for lenders to make mistakes with the payments and not pay the bills on time so then you are stuck in the middle with trying to get it fixed.
This happened to us ... once. The next day I called them, read them the riot act, took control and never looked back. Nobody cares about paying your debts on time like you do (and, of course, the person to whom you owe the debt.) :happy
"Re-verify our range to target ... one ping only."

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by retiringwhen » Tue Jun 04, 2019 3:00 pm

I have had mortgages with and without escrow, in the end, the effort for each is about the same. I currently have escrow (and 75% equity in the house) but don’t bother to get rid of it since I have a good system for budget with a fixed mortgage payment and don’t feel the need to get rid of it.

My mortgage servicer is above average in reliability, so I don’t see many issues on their side. The only mess was my attempts at pre-payment of 2018 property taxes as part of the SALT limitation changes. It took more work than seemingly necessary, but it all worked out in the end.

Since I am providing some float to the bank on the escrow account funds, I am sure I am leaving a couple of $20 bills on the table, but I haven’t been motivated to do anything about it.

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CAsage
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by CAsage » Tue Jun 04, 2019 3:04 pm

Another really good reason to control your own Property Tax payments is the option to "bunch" that deduction every other year, should that allow you to itemize. Works in some circumstances, especially if you are close to the standard deduction....
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

seity
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by seity » Tue Jun 04, 2019 3:06 pm

I have no problem with my bank holding the escrow. They are a small local CU and pay 2% interest on the money in escrow, and have since I switched my mortgage over to them. There's no risk of them selling it to anyone else and it meant a lower interest rate on my mortgage. I could just as easily paid the taxes myself and had control over the money, but there's really no benefit in my eyes in my current situation.

barnaclebob
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by barnaclebob » Tue Jun 04, 2019 3:06 pm

I can't bunch my property taxes year to year and the extra interest I'd earn from paying it myself isn't worth the risk of forgetting about a biannual payment. So, I let the bank handle it.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Big Dog » Tue Jun 04, 2019 3:08 pm

I refuse to use an escrow, and choose lenders accordingly. (Back in the dark ages, an escrow was just an interest-free loan to the lender, so I got into the habit of paying my own property taxes...)

And I did bunch tax payments on occasion to exceed the standard deduction.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by veindoc » Tue Jun 04, 2019 3:31 pm

Our property taxes are $15k per year. My escrow account does not pay interest. If my property taxes were low, say 2 to 3,000, I suppose it wouldn’t bother me so much.

123
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by 123 » Tue Jun 04, 2019 3:34 pm

Yes it's time to put on your big boy (or girl) pants and handle property insurance and property tax payments yourself.
The closest helping hand is at the end of your own arm.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by niceguy7376 » Tue Jun 04, 2019 3:42 pm

My personal experience:
PRO - Fixed monthly payment added to mortgage loan payment.

CON -
I need to send the property bill to them.
I need to send Insurance premium bill to them

With no Escrow, I pay my property bill with a new Credit Card that I took for bonus offer and pay 2% extra for CC processing but get a lot more in bonus.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by sport » Tue Jun 04, 2019 3:54 pm

Jack FFR1846 wrote:
Tue Jun 04, 2019 2:46 pm
Never had escrow, never wanted it. I see no advantage to handing someone my money in order for them to screw up a payment. I'll pay myself, thank you very much.
My reaction exactly!

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by obafgkm » Tue Jun 04, 2019 5:03 pm

bigtex wrote:
Tue Jun 04, 2019 2:42 pm
What do bogleheads do concerning escrow? Do you get rid of it as soon as your able to allow greater flexibility? Or do you keep it as its two less bills to keep track of (RE taxes & Home Ins.)?
I have had escrow for the last 19 years (over two primary residences). One of the Boglehead tenets is to simplify; I don't want to think about payments that I don't have to think about. One payment per month takes care of my mortgage as well as insurance and property taxes.

lkar
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by lkar » Tue Jun 04, 2019 5:13 pm

Our assessor and our insurance company don't charge for credit card payments so I love no escrow, to get the points or cashback.

quantAndHold
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by quantAndHold » Tue Jun 04, 2019 5:14 pm

I found that I have a much stronger interest in getting the property tax and insurance payments done correctly. The bank was perfectly happy to miss insurance payments, then charge me for their overpriced insurance when my homeowners insurance got canceled. Incentives matter.

Also,it depends on whether or not my state requires banks to pay interest on the impound account. I would rather keep the money in an account that earns interest.

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corn18
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by corn18 » Tue Jun 04, 2019 5:26 pm

Another great BH thread that has helped me out. I am on the phone right now cancelling escrow (they pay no interest). Property taxes and insurance are $20k/year, so will be nice to get that escrow balance into FZDXX earning some interest.
Don't do something, just stand there!

mortfree
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by mortfree » Tue Jun 04, 2019 7:55 pm

Agree on not using an escrow account. Never have.

Now that means I am not forced to pay $1000 more each month to cover those expenses.

I can save at my own rate to ensure I can make the property tax payments and insurance payments.

rkhusky
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by rkhusky » Tue Jun 04, 2019 8:29 pm

You ignore your escrow payments at your peril. The Gov’t doesn’t care that it is the bank’s fault the property tax is late or the wrong amount or for the wrong property. The Gov’t will assess penalties, which will not be waived. The Gov’t doesn’t care if you give them bad ratings on Google or make nasty comments on social media. The Gov’t has no competition to which you can switch.

Making sure the escrow payments are made properly is as much work as making the payments myself.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Arthur Digby Sellers » Tue Jun 04, 2019 8:32 pm

I removed escrow after Citi repeatedly bungled the calculations. My property tax + insurance is just under $12,000 per year, so it is a cinch for me to set aside the proper amount from my monthly paycheck so I have the funds in savings when the bills arrive.

Citi, somehow, was unable to perform that calculation. They started by only escrowing $750 per month until my escrow balance was negative (I wasn’t paying close attention to it). Then they overreacted and started taking out $1,500 per month, which messed with my monthly budget. Then they could not figure out what the heck to do when I wanted to pay my 2018 property taxes in 2017 to take advantage of the last year of that tax deduction. Since the escrow “service” was costing me considerably more time and energy than it was saving me, I cancelled it.

student
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by student » Tue Jun 04, 2019 8:58 pm

I agree with others that you should remove it for the reasons that they gave.

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Tamarind
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Tamarind » Tue Jun 04, 2019 9:10 pm

I also quit using escrow when I refinanced. I see no reason why anyone but me should earn interest on the cash that will pay those bills. I also found that paying my own insurance bill helped remind me to review insurance costs and consider changing carriers more often, so it also saved me money.

For those who use escrow not to forget a bill, I have my insurance auto-billed to credit card. The property tax bill comes in the mail several months in advance of the due date and is impossible to miss. It's the only bill I pay by check. It's really only 5 minutes a year in return for 2% + interest.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by MikeG62 » Wed Jun 05, 2019 8:11 am

Watty wrote:
Tue Jun 04, 2019 2:45 pm
bigtex wrote:
Tue Jun 04, 2019 2:42 pm
What do bogleheads do concerning escrow? Do you get rid of it as soon as your able to allow greater flexibility? Or do you keep it as its two less bills to keep track of (RE taxes & Home Ins.)?
Get rid of it.

It is not uncommon for lenders to make mistakes with the payments and not pay the bills on time so then you are stuck in the middle with trying to get it fixed.
^This.

Got rid of mine a year or so after I took out the mortgage (this was back in 2003) as the bank was overwithholding to the escrow. Calls to the bank could not get them to resolve it (although the CS rep I spoke to agreed I was paying in more than seemed reasonable). I asked if I could just pay the taxes and insurance myself. They said yes. I immediately closed the escrow and never looked back.
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by willthrill81 » Wed Jun 05, 2019 9:31 am

One tiny advantage to removing Escrow is that if you make 'Escrow payments' to yourself to something like a high-yield savings account, you can earn a little interest on the funds, which is what the banks are doing themselves with Escrow funds.
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by dm200 » Wed Jun 05, 2019 9:38 am

bigtex wrote:
Tue Jun 04, 2019 2:42 pm
What do bogleheads do concerning escrow? Do you get rid of it as soon as your able to allow greater flexibility? Or do you keep it as its two less bills to keep track of (RE taxes & Home Ins.)?
When we refinanced with Navy Federal Credit Union, we were able to "opt out" of escrow. We did. That gave us more flexibility - and no big deal to keep track of. Here, we pay real estate tax in two installments (May and October). We pay homeowners insurance once a year.

onourway
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by onourway » Wed Jun 05, 2019 9:42 am

I found that once I was making payments myself I was much more tuned in to what was happening with local property tax rates. Perhaps this would have occurred the same just as a process of maturing, but I think actually receiving and paying the bills holds some value as a resident.

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dm200
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by dm200 » Wed Jun 05, 2019 9:46 am

onourway wrote:
Wed Jun 05, 2019 9:42 am
I found that once I was making payments myself I was much more tuned in to what was happening with local property tax rates. Perhaps this would have occurred the same just as a process of maturing, but I think actually receiving and paying the bills holds some value as a resident.
Yes ;)

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by mptfan » Wed Jun 05, 2019 9:47 am

Jack FFR1846 wrote:
Tue Jun 04, 2019 2:46 pm
I see no advantage to handing someone my money in order for them to screw up a payment. I'll pay myself, thank you very much.
+1

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dodecahedron
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by dodecahedron » Wed Jun 05, 2019 10:03 am

willthrill81 wrote:
Wed Jun 05, 2019 9:31 am
One tiny advantage to removing Escrow is that if you make 'Escrow payments' to yourself to something like a high-yield savings account, you can earn a little interest on the funds, which is what the banks are doing themselves with Escrow funds.
We bought our first house in the early 1980s, and this was a really big advantage at that time. The interest rate paid on escrow accounts was minuscule at a time when you could get double digits on money market funds. Interest rates are obviously much lower now, but 2.2% at Ally is nothing to sneeze at with property taxes as high as they are these days.

Another advantage of getting rid of escrow is that we had had some issues with mortgages moving between servicers and getting property taxes mailed to the new mortgage servicer and paid in a timely manner. One year we wound up paying the bill ourselves and later getting refunded by our escrow company because it would otherwise not have been on time.

Another advantage of getting rid of escrow: if you are deduction-lumping and have some flexibility as to which tax year your payment falls into, you have control if you pay it yourself but not if your bank escrow pays it. (E.g., my town/county property tax bill comes in late December and is due by end of January.)

Also if you are shopping around your homeowners insurance periodically to keep that cost low, it is easier not to have to make sure the escrow payments are rerouted to your new insurance company.

Another advantage: I pay my homeowners premium with a BoA credit card that gives me 2.65% cash back. No charge for using the credit card. In some places, you can also use a credit card to pay your property taxes at a fee lower than that (not here unfortunately.)

Another tiny advantage: getting rid of your escrow account means one less data item you need to put into your tax software each year (for the interest paid on the escrow account) and slightly simplifies your eventually settlement statement when you sell.

All in all, I vote for getting rid of escrow.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Grogs » Wed Jun 05, 2019 10:07 am

veindoc wrote:
Tue Jun 04, 2019 3:31 pm
Our property taxes are $15k per year. My escrow account does not pay interest. If my property taxes were low, say 2 to 3,000, I suppose it wouldn’t bother me so much.
I'm in that category. My property taxes run around $1200. With insurance, call it $2k. I figure the average daily balance on my escrow account is $1200, or about $24/year in interest if I kept the money in a high-yield savings account. I just haven't found it worth the bother to cancel the escrow for such a small amount. If I had to pay $10k+, I would have ditched escrow a while ago.

Like others have mentioned, my escrow does fluctuate year-to-year, basically overshooting one year, then undershooting the next. The difference is pretty small though, to the tune of +/- $25/month, which doesn't really bother me.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by dodecahedron » Wed Jun 05, 2019 10:09 am

dm200 wrote:
Wed Jun 05, 2019 9:46 am
onourway wrote:
Wed Jun 05, 2019 9:42 am
I found that once I was making payments myself I was much more tuned in to what was happening with local property tax rates. Perhaps this would have occurred the same just as a process of maturing, but I think actually receiving and paying the bills holds some value as a resident.
Yes ;)
Absolutely! I also like going in person to town hall to pay my property tax bills. (I routinely pass by my town hall on my way to other regular destinations.) I make sure to get a date-stamped receipt showing exactly when it was paid (for tax year issues.) In recent years, I have also double-checked that paperwork was in order to transition to age 65 senior exclusions while I was there with permission for my town to get ongoing access to state income records to determine continuing eligibility.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by alpenglow » Wed Jun 05, 2019 10:13 am

CAsage wrote:
Tue Jun 04, 2019 3:04 pm
Another really good reason to control your own Property Tax payments is the option to "bunch" that deduction every other year, should that allow you to itemize. Works in some circumstances, especially if you are close to the standard deduction....
I'm in NY and my taxes are about $15k. Just recently started bunching to get the standard deduction ($16k) one year followed by the bunched $30k deduction the next. Not worth a ton of money, but after accounting for lost interest, I'm up about $750 per cycle. I'll take it.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by surfstar » Wed Jun 05, 2019 10:27 am

I just ran the numbers on what amount of interest we're "missing" out on by using an escrow account - @ 2.5% APY, it was about $52/year.
That didn't account for the fact that the escrow account earns more than 0% interest as well. So, likely less than $40/year.
Not worth the hassle of changing anything, for us. We are able to provide our own insurance and can shop around, which helps.

If they miss/mess up a tax payment, then we'll revisit.

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Michael Patrick
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Michael Patrick » Wed Jun 05, 2019 10:37 am

I'm perfectly capable of keeping track of what my property taxes will be and setting aside the necessary funds.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Gray » Wed Jun 05, 2019 10:45 am

I pay property insurance along with all my other policies.

For taxes and mortgage payments, I manage my own savings account with Ally. It’s also a source of liquidity if it was ever needed for some unforeseen emergency—and it would need to be a real significant emergency.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Admiral » Wed Jun 05, 2019 11:52 am

Devil's Advocate: I don't mind escrow one bit. The interest I might earn is immaterial to be. It's one (or two) fewer bills to worry about, and, I don't need to think about putting $x aside each month. It's easy and tempting to spend those dollars when they're not needed for 11 months. "I'll just pay myself back later" is easy to use to justify spending the money.

I've owned home for 20+ years and the mortgage servicer has never missed or sent an incorrect payment for insurance or taxes. Not to say it hasn't happened to others.

I would not say it's wise or unwise. It's personal preference.

MathWizard
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by MathWizard » Wed Jun 05, 2019 12:04 pm

I got rid of it as soon as I could.

Once you pay of your house you won't have escrow anymore anyway.
I'm old school and cut the checks, but I'm sure you could automate this
payments anyway rather than giving the escrow company an interest free loan.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Bacchus01 » Wed Jun 05, 2019 12:19 pm

Admiral wrote:
Wed Jun 05, 2019 11:52 am
Devil's Advocate: I don't mind escrow one bit. The interest I might earn is immaterial to be. It's one (or two) fewer bills to worry about, and, I don't need to think about putting $x aside each month. It's easy and tempting to spend those dollars when they're not needed for 11 months. "I'll just pay myself back later" is easy to use to justify spending the money.

I've owned home for 20+ years and the mortgage servicer has never missed or sent an incorrect payment for insurance or taxes. Not to say it hasn't happened to others.

I would not say it's wise or unwise. It's personal preference.
I think it depends largely on the amount. If you are paying tens of thousands of dollars a year into escrow, I'd suggest that you are not making the most financially savvy decision by escrowing.

dcabler
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by dcabler » Wed Jun 05, 2019 12:21 pm

Never had it, never will.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by Admiral » Wed Jun 05, 2019 12:26 pm

Bacchus01 wrote:
Wed Jun 05, 2019 12:19 pm
Admiral wrote:
Wed Jun 05, 2019 11:52 am
Devil's Advocate: I don't mind escrow one bit. The interest I might earn is immaterial to be. It's one (or two) fewer bills to worry about, and, I don't need to think about putting $x aside each month. It's easy and tempting to spend those dollars when they're not needed for 11 months. "I'll just pay myself back later" is easy to use to justify spending the money.

I've owned home for 20+ years and the mortgage servicer has never missed or sent an incorrect payment for insurance or taxes. Not to say it hasn't happened to others.

I would not say it's wise or unwise. It's personal preference.
I think it depends largely on the amount. If you are paying tens of thousands of dollars a year into escrow, I'd suggest that you are not making the most financially savvy decision by escrowing.
Very true. Mine's less than 10k. I guess if it was really high I would care. OTOH, my taxes just went up and I got the dreaded "escrow shortage" letter, so now I need to give them even more money.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by lazydavid » Wed Jun 05, 2019 12:34 pm

Jack FFR1846 wrote:
Tue Jun 04, 2019 2:46 pm
Never had escrow, never wanted it. I see no advantage to handing someone my money in order for them to screw up a payment. I'll pay myself, thank you very much.
This. I think I'm on my fifth (likely final) mortgage, and have never had escrow ever. They always ask, and I always politely decline.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by LesBleus** » Wed Jun 05, 2019 12:44 pm

dm200 wrote:
Wed Jun 05, 2019 9:38 am
bigtex wrote:
Tue Jun 04, 2019 2:42 pm
What do bogleheads do concerning escrow? Do you get rid of it as soon as your able to allow greater flexibility? Or do you keep it as its two less bills to keep track of (RE taxes & Home Ins.)?
When we refinanced with Navy Federal Credit Union, we were able to "opt out" of escrow. We did. That gave us more flexibility - and no big deal to keep track of. Here, we pay real estate tax in two installments (May and October). We pay homeowners insurance once a year.
Is this all you have to do if you don't have escrow? Pay property taxes, mortgage and home insurance?

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changingtimes
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by changingtimes » Wed Jun 05, 2019 1:25 pm

If you ask your mortgage lender to remove escrow, what do they take into account when making the decision?

(The thought to do it actually never occurred to me before now, but yeah, I can handle it myself. I know my father always has refused to do escrow.)

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F150HD
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by F150HD » Wed Jun 05, 2019 1:38 pm

some lenders require it (for ins or taxes or both).

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dm200
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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by dm200 » Wed Jun 05, 2019 2:15 pm

F150HD wrote:
Wed Jun 05, 2019 1:38 pm
some lenders require it (for ins or taxes or both).
Very true. I believe that if we had a mortgage approaching the "value" of our house OR less than sterling credit and history - then we would not have been able to opt out of paying into escrow.

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Re: Is it Wise to Remove Escrow if Bank Allows it?

Post by SC Anteater » Wed Jun 05, 2019 2:41 pm

LesBleus** wrote:
Wed Jun 05, 2019 12:44 pm
dm200 wrote:
Wed Jun 05, 2019 9:38 am
bigtex wrote:
Tue Jun 04, 2019 2:42 pm
What do bogleheads do concerning escrow? Do you get rid of it as soon as your able to allow greater flexibility? Or do you keep it as its two less bills to keep track of (RE taxes & Home Ins.)?
When we refinanced with Navy Federal Credit Union, we were able to "opt out" of escrow. We did. That gave us more flexibility - and no big deal to keep track of. Here, we pay real estate tax in two installments (May and October). We pay homeowners insurance once a year.
Is this all you have to do if you don't have escrow? Pay property taxes, mortgage and home insurance?
Yes, that's it.

For me, that means I pay my property insurance once a year, and pay property taxes twice a year. It's not that hard to remember.

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