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Started By
Message
Escrow or No Escrow
Posted on 3/18/23 at 8:43 am
Posted on 3/18/23 at 8:43 am
Just sold my first house and in the process of buying my second house. I’m a little naive to the whole process. I did not escrow with my first house. Bank is not requiring escrow with second house I am about to buy but I can if I want.
Are there any financial benefits to escrow vs no escrow?
Thanks
Are there any financial benefits to escrow vs no escrow?
Thanks
9
Posted on 3/18/23 at 8:59 am to tigerfootball123
Are there any financial benefits to escrow vs no escrow?
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It's just a convience.
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It's just a convience.
Posted on 3/18/23 at 9:19 am to ItzMe1972
Convenience and mentally easier to put a little in each month vs having to stroke a big check once a year.
Posted on 3/18/23 at 9:25 am to Im4datigers
quote:
Convenience and mentally easier to put a little in each month vs having to stroke a big check once a year.
x2
I've done both and prefer the escrow in 1/12th increments per month rather than stroking a check for the entire amounts when tax and insurance renewal time roll around.
Posted on 3/18/23 at 9:25 am to tigerfootball123
I’ve never escrowed and it’s never presented a problem.
Posted on 3/18/23 at 9:28 am to tigerfootball123
I don’t mind it. Don’t have to deal with keeping so much $ per month allocated in my savings towards insurance and tax
Posted on 3/18/23 at 9:29 am to tigerfootball123
No escrow gives the financial benefit of the potential to earn interest on the money during the year instead of doling it out to the bank monthly. You can easily get 3.4% these days.
But it also means you have to be disciplined enough to ensure you have cash on hand when the insurance and tax bills arrive.
But it also means you have to be disciplined enough to ensure you have cash on hand when the insurance and tax bills arrive.
Posted on 3/18/23 at 9:38 am to Twenty 49
This is what I’m thinking. Do you know of any high yield savings that are offering this?
Posted on 3/18/23 at 9:55 am to tigerfootball123
Just how much money are you going to earn here though.
4% of $5000 is a whopping $200 a year. And I’m not sure if your escrow is even that high. To me, more of a PITA than it’s worth.
4% of $5000 is a whopping $200 a year. And I’m not sure if your escrow is even that high. To me, more of a PITA than it’s worth.
Posted on 3/18/23 at 10:09 am to Im4datigers
Good point, didn’t really think about that
Posted on 3/18/23 at 1:13 pm to jfw3535
quote:
I've done both and prefer the escrow in 1/12th increments per month rather than stroking a check for the entire amounts when tax and insurance renewal time roll around.
Now that I own I self escrow with separate account that gets d posited every paycheck
I still hate stroking the check lol
Posted on 3/18/23 at 1:31 pm to tigerfootball123
I much prefer no escrow if you can get out of it. It takes almost no time to pay your own taxes and insurance, and then you are in charge and don’t have to worry about a late payment by your lender.
The financial benefits are that you don’t have thousands of dollars tied up in an account earning 0% interest.
The financial benefits are that you don’t have thousands of dollars tied up in an account earning 0% interest.
Posted on 3/18/23 at 1:55 pm to tigerfootball123
Mortgage pricing is better with an escrow.
You can usually get the difference in pricing by asking "how much do I need to pay in points to get the interest rate down 0.125?"
I prefer not to escrow. But I don't prefer it to affect the loan rate
You can usually get the difference in pricing by asking "how much do I need to pay in points to get the interest rate down 0.125?"
I prefer not to escrow. But I don't prefer it to affect the loan rate
Posted on 3/18/23 at 3:56 pm to meansonny
Some people like the no escrow to have another avenue for credit card spend bonuses 
Posted on 3/18/23 at 5:18 pm to tigerfootball123
quote:
Do you know of any high yield savings that are offering this?
https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts
Posted on 3/18/23 at 5:32 pm to tigerfootball123
No
Put away monthly for escrow into a conservative investment account (5%) and when it comes tax time , pay it out of that.
Put away monthly for escrow into a conservative investment account (5%) and when it comes tax time , pay it out of that.
Posted on 3/18/23 at 7:01 pm to Hou_Lawyer
quote:
conservative investment account (5%)
Where
Posted on 3/18/23 at 7:09 pm to thelawnwranglers
quote:
Where
Money markets are in the 4s and short term T-bills hit 5% like last week.
Posted on 3/18/23 at 7:22 pm to tigerfootball123
Posted on 3/18/23 at 7:24 pm to tigerfootball123
Depending on who your bank is, they can wildly screw up escrow, and they can end up asking you for a couple of thousands of dollars the day after Thanksgiving, due by 31 DEC.
But if you're married, it's the only way to keep your soon to be ex-wife from spending all of the money you're saving on a Disney cruise or a house at 30A. Just this once.
But if you're married, it's the only way to keep your soon to be ex-wife from spending all of the money you're saving on a Disney cruise or a house at 30A. Just this once.
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