getting out of our escrow

home_crap_homeOctober 7, 2006

Is there any way to get out of escrow collection?

Our mortgage company, Chase, collects monthly for our insurance and tax payments. Our tax/insurance bills aren't that bad, and we're perfectly capable of paying them ourselves, plus, I'd like to have the monthly interest we're losing, as miniscule as it is. We've paid off about 60% of the mortgage.

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Have you asked them to let you pay it yourself? We did, and it was as simple as writing them a letter.

    Bookmark   October 8, 2006 at 6:40AM
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We put x amount into a seperate checking account so when these bill come due, all I have to do is write a check from that account. Most banks will let you have at least one free checking account/

    Bookmark   October 8, 2006 at 4:28PM
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We called our mortgage company up on the phone and were surprised to find that it was no big deal to discontinue escrow. When we originally took out the loan, our mortgage broker strongly "encouraged" us to escrow saying that the mortage package was much more easily resold if it included escrow and that without escrowing he would have to charge us a higher rate.

    Bookmark   October 9, 2006 at 12:00AM
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Actually, we haven't even asked them yet. I'd read that it was very difficult to discontinue escrow and that they might jack up our interest rates if we did so. So I'll just call'em up and see what they say. Thanks!

    Bookmark   October 9, 2006 at 12:40AM
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They can't jack up your interest rate just for doing that-you've signed a loan for x amt of $$$ at x%. It can't be changed on a whim of the mortgage company. Even the variable rates have rules.

    Bookmark   October 9, 2006 at 7:49AM
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When we bought our house, we never had the mortgage company involved in our homeowner's insurance--we bought and paid for it ourselves, and just periodically had to provide them proof that we had a policy of sufficient size in effect. I don't know how easily you can get out of the arrangement if you've started letting them collect your premiums, but there's certainly no harm at all in calling and asking the question.

I do that all the time--ask questions (drives my lawyer nuts, but he's very good-natured about it). As a matter of fact, we've got our car loan down to a balance where I'll probably be calling in a few weeks to see if they'd be interested in discounting the remainder if we paid it off in a lump sum--have done that several times before and we always save a few $$$ by doing it. So do ask--you never know the answer until you ask the question. Good luck.

    Bookmark   October 9, 2006 at 8:12AM
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We had an escrow account with our first home and I will never do it again! We moved into a brand new area and the mortgage company way over estimated how much our taxes and insurance would be. We had a huge surplus in our escrow account and I called countrywide for a refund. They hummed and hawed, and it took a few phone calls, but we got the refund. We then requested the account be closed because checking with the county office, our taxes were much less than their second estimate. I got tired of our money sitting in Countrywide with them earning interest on it.

When we got our mortgage with the 2nd house, we told the mortgage company up front NO ESCROW account. They complied with no problems whatsoever. There is no way I will let perfectly good money make interest for someone else when we can make it ourselves.

Just call the mortgage company. Tell them you want the escrow account closed and you will pay your taxes and insurance. If they refuse, tell them that you are thinking of refinancing and you will not go through them.

If you are paying mortgage insurance, because you owe less than a certain percentage, you should not be paying mortgage insurance anymore (if you are). I can't remember what the LTV is, but since you owe less than 40%, I think you qualify.

    Bookmark   October 16, 2006 at 1:12AM
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LTV on a mortgage with escrow account is 80% and above. Legally, mortgage companies generally cannot make you have an escrow account with them if LTV is less than 80%. There are some exceptions to this such as self-employed, self-reported income, credit history and these vary by state. Many banks will push you to do the escrow and most people find it easier but the financial drawback is you don't earn that 12 months of interest-the bank does.

    Bookmark   October 29, 2006 at 7:26PM
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