Escrows in or out?

If you are disciplined leave the escrow out.

Option 1: Pay the bank some each month
Option 2: Let the money set in my interest bearing account until I absolutely have to pay.

 

Well I had no choice, it was in for me. I think it would be better for you to pay it off on your own as long as you do pay it off.

Good suggestion by ^^^^^ post.

 

I don't escrow.

I put all my music money into a high interest savings account (earning about 6% right now) and pay my taxes and insurance at the end of the year myself.

 

if you're not gonna freak out at the end of the year b/c it WILL be a huge chunk of money, then keep it out.

 

If you escrow, you are going to get screwed, because the escrow company is making money off of your money instead of you.

I escrowed for the first three years I owned a house. I refinanced in May 2004, after my property taxes had been paid off....and received a $2,500 check from the escrow company.

 

I use it.

I always think itis better to be safe than sorry,

 

I do to. I'm not disciplined enough to hold on to the money. I'd rather they deal with is. I have gotten a check every year from my escrow account. I really know nothing about this stuff and woud rather they take care of these things for me. I know they make money off of my money, but that's a service I'm willing to pay for.

 

Tell me where this bank is whereyou get 6%...

oh and I don't escrow...You usually can get around this if you do a put 20% down or do an 80/10/10 or 80/15/5...

 

GMAC didn't let me do this even though I paid 20%. I guess it is not a whole lot but it is a couple of good dinners I could have saved.

 

I get over 5%.

E*Trade

 

Another good thing about doing your own escrow is I have heard at least 2 cases in my wife's family where they have messed up the escrow account and they (the company) didn't put aside each month for the bills. It was a couple of years before they (the company) notified them (the homeowners) that they (the company) messed up. The solution? The homeowner must either pay the amount short ($1000s) in 1 lump sum and increase their mortgage payment so it doesn't happen in the future. Or Increase the mortgage payment so they can catch up in 1 year and then drop it back to an amount higher than before so that it doesn't happen in the future. Either way both family members were wrecked. One's mtg payment was doubled - they ended up getting foreclosed on. The other one is just now going through it and is seriously contemplating bankruptcy.

I'd use discipline and do it myself, but if you don't you may want to see a yearly balance of your escrow account so you don't have the same problem.

 

i do not escrow and recommend this to everyone buying a house.
i have seen too many cases where the owner either under pays or over pays and gets stuck the following year with a higher payment.

 

Sad story but shouldn't these people have realized that something was not correct. If they didn't catch it then, I don't see how doing it themselves will be better.
I escrow, don't mind it

 

HSBC offers 6% on all new money....until next month anyway. But their interest rates are as good as I've seen out there for a regular ol' savings account.

Some good info in this thread:

http://bbs.clutchfans.net/showthread.php?t=123758&highlight=hsbc

 

Does your lender charge you a fee if you choose to pay your property tax on your own?

Mine does, they charge a .25 point fee on the loan amount.

The company is CTX Mortgage. (Hate them, but had to used them in order to get the incentive)

 

Just be careful with a bank you cannot set foot in...

btw- www.compassbank.com has some good products right now... as do most credit unions (usually even better).