Condo Purchase: Escrow Question

[J9News]

I'm looking to purchase a condo but do not want Escrow and do not want to roll up the taxes and insurance into my mortage. 750 mid-mortgage score. 20% down. Anyone know if I can forgoe escrow?

Not sure if condo purchase is a category that requires it or not.

Thank you in advance

[Revelate]

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@J9News wrote:

I'm looking to purchase a condo but do not want Escrow and do not want to roll up the taxes and insurance into my mortage. 750 mid-mortgage score. 20% down. Anyone know if I can forgoe escrow?

Not sure if condo purchase is a category that requires it or not.

Thank you in advance

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Lenders might have particular requirements but when I was shopping for my condo last year, nobody said boo (and the rates were the same with all 6 lenders I talked to) when I said no way in hell am I escrowing.  

Should be fine, worst case go talk to another lender as 750 w/20% down lenders will want a piece of that so to speak.

[StartingOver10]

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@J9News wrote:

I'm looking to purchase a condo but do not want Escrow and do not want to roll up the taxes and insurance into my mortage. 750 mid-mortgage score. 20% down. Anyone know if I can forgoe escrow?

Not sure if condo purchase is a category that requires it or not.

Thank you in advance

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^^^Those two are the same thing (rolling up taxes and insurance into your mortgage payment is the same as escrow).  

Just ask your LO. Most of the time it is easy to not have taxes and insurance paid in your payment, but you need to specify that with your LO right up front.  

Some lenders have an escrow waiver fee so ask about that too. There is a requirement of most lenders to have at least 20% down (which you do). 

[Anonymous]

I am just trying to gain an understanding as I start my process; Is there a reason why one would not want to have the taxes and insurance rolled into ones payments? I was not aware that one can say no to escrow, I thought it was mandatory if requested.

Last question is Escrow the same thing as reserves? And is the only way to bypass it with 20% down no less?

thanks.

[StartingOver10]

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@Anonymous wrote:

I am just trying to gain an understanding as I start my process; Is there a reason why one would not want to have the taxes and insurance rolled into ones payments? I was not aware that one can say no to escrow, I thought it was mandatory if requested.

Last question is Escrow the same thing as reserves? And is the only way to bypass it with 20% down no less?

thanks.

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No, escrow is not the same as reserves.  Escrow is the same thing as "impounds" (some areas use that word rather than escrow)

Reserves - the best definition is one that Fannie Mae uses https://www.fanniemae.com/content/guide/selling/b3/4.1/01.html

[Revelate]

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@Anonymous wrote:

I am just trying to gain an understanding as I start my process; Is there a reason why one would not want to have the taxes and insurance rolled into ones payments? I was not aware that one can say no to escrow, I thought it was mandatory if requested.

Last question is Escrow the same thing as reserves? And is the only way to bypass it with 20% down no less?

thanks.

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They don't always match reality for one (adjusted frequently) and the fact is it's effectively a loan to the bank.

I understand why it was done and why some people like it (reduce the number of payments) but end of the day it's money sitting in a bank account earning you zero interest, when it could be sitting in your account earning interest over the same period.  I make 4 payments total for insurance and tax, all online, probably 10 minutes out of my life, for keeping some fraction of roughly 7.5K in my accounts over the course of the year (admittedly at not a fantastico interest rate but anyway).  Plus if life does ever get tight, I can float my taxes and probably insurance on a credit card (hello rewards too); it's a lot harder to do that cost effectively on the mortgage payment if at all.

If the banks didn't make more money that way doubt they'd push it.

[blondy250]

I escrow my taxes and insurance with Chase , and I absolutely get interest paid to it by Chase,quite a bit actually.

[Revelate]

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@blondy250 wrote:
I escrow my taxes and insurance with Chase , and I absolutely get interest paid to it by Chase,quite a bit actually.

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What type of account is it stored in, and what specific APR?