Refinance Escrow Question

[suzyp]

Hi all - ANOTHER refinance question.

We are looking to refinance and it appears we can go from 30 year at 4% to 15 year at 2.375%, with about $3900 in closing costs.  

Our mortgage broker asked if we wanted to add a new escrow account, bring our escrow account with us, or waive it all together. Is there a pro/con to doing any of these options?

We pay about $770 a month to escrow (taxes and insurance premiums).  Without it, I would stick $800 into savings each month and I pretty disciplined about things like that.

Thanks all!

[madisen]

I always prefer to waive escrows because I have the same discipline, I like to control it, and I don't like the escrow assessments that servicing companies make sometimes.

If you are going to have an escrow account, in my opinion it's advantageous to you to have the lender/servicer net the escrow account and bring it with you rather than opening a new one.

Opening a new one would entail funding it yourself out of pocket when your loan closes and then waiting for the funds from your escrow account from your previous servicer.

[flygirl]

I would not do an escrow account-for some reason it always seems to take 1-3 yrs for them to get it right. Plus, as insignificant as it is, I’ll still take the interest I get on my money.

[puppylove64]

I prefer to do my own escrow assessment and earn interest on it. Sometimes the interest rate and/or fees are higher when you do your own escrow. You should ask about that.

[aspentosh]

Same as everyone else. I do our escrow because of discipline, I get that interest, and it's annoying for them to regularly adjust the escrow amount.

[k3am]

We had always escrowed for the convenience.. last mortgage, we had SO MANY ISSUES with it. Like them not paying our taxes, despite escrowing for them..

I will never escrow again.

[suzyp]

Thanks everyone. We're going to do without it. Didn't change our interest rate. I would rather control it and get the little interest on the money too.

[Susie]

I don’t escrow. I prefer to have control myself, plus it reduced prepaids required at closing. I already pay quarterly estimated income taxes, so it’s not much more work.

[sandandsea]

We don’t escrow. We had a bank mess it up when we bought our new house and never again. Instead of paying the tax, they issued a refund and they pay it on the last day so there is no time to fix their error before penalties are assessed. I was livid.