Realtor Â® ABR / EPRO/Relocation Specialist
Long and Foster Real Estate
92 Lancaster Ave. Devon,PA 19333
Banks like to bundle it so they know it gets paid because tax liens go ahead of mortgage liens. By having you pay into an escrow account they have the funds to pay the taxes when they are due. Similarly, they like to have the insurance so they know the property is covered should something happen.
Oncve you have established some history with the mortgage company they may allow you to pay the taxes yourself, some charge a fee for this others don't.
Most lenders prefer to pay the taxes annually and collect from you 1/12th every month. Typically, if you put 20% or more down, you may be able to choose not to escrow, but there is a fee you must pay to the lender to do so. This is the same for property insurance. These are good questions for your lender as it depends on their policies. You are not paying interest on the escrow monies they collect, they hold the money until the payments are due.
I hope this is helpful. Have a great day!
Keller Williams Realty
No, you are not paying interest nor are you receiving interest on the escrow account. Hope this is helpful,