Ending escrow on home loan

[AUinAustin]

Does anyone know if this can be done? I would prefer to pay my taxes myself rather than hoping the mortgage company pays them in December and not January. Would this require a new loan or something simple?

 

[mishatx]

Contact your lender. They will probably do it with some conditions:

You must have 80% LTV or less
You must not be paying PMI
All your payments are on time
Your credit is good
You ask nice
etc

They will charge you a fee to close your escrow account. It might be as much as 1% of the value of your loan. It may be negotiable, but remember that by stopping escrow, you're taking away an income source for them. You will need to figure out if the money you make in interest in saving your taxes and insurance in your own account will pay back the fee before you sell the house.

You probably have two months reserve in your escrow account beyond what you need for taxes and insurance and you could decide to consider this money sunk and use it to pay the conversion fee and declare yourself ahead.

The other option is to refinance and get a loan without escrow. Refinancing just to drop escrow will probably cost too much, but if you can get a better rate or shorter loan term at the same time, it can work.

 

[madscientist]

also depends on the type of loan you got. most subprime loans did not have extra fees to escrow, just your choice at closing. regardless of LTV. you should be able to call up and just ask to stop the account and they'll mail you a check with the balance. for "A" paper loans, its like stated above.

 

[AUinAustin]

It's a standard 30 year loan and I put 50 percent down so no PMI.

 

[planohorn91]

If you put 50% down, you should have been able to opt out of escrow when you got the loan.