Question Details

Bfleming15, Home Buyer in Auburn Hills, MI

Will You explain in full detail what an escrow is and why its used? Should I included my house insurance in my mortgage or not?

Asked by Bfleming15, Auburn Hills, MI Wed Oct 10, 2012

Im a first time buyer and my loan is going to go through and i am a disable person and i do have to count every penny.

Help the community by answering this question:

Answers

2
Scott provided a good answer. Look at it like a savings account for your mortgage. The lender takes a portion of your payment and puts it into escrow to pay for taxes & insurance on your behalf. There's no harm in it. In fact, it's kind of nice to not have to worry about paying those two bills on your own.

I'd like to add that some mortgage companies don't let you choose to have escrow or not. It's mandatory. They want to know for sure that your homeowners insurance and taxes on the property are being paid. They want to know it's insured. Check with your loan officer.
0 votes Thank Flag Link Wed Oct 10, 2012
When you set up a escrow, it basically has you breaking the cost of items such as inurance and property taxes up into 12 monthly payments. It is collected 6 months or a year in advanace and then paid on your behalf. If you get a fixed income it may be good. If you have an extensive savings and prefer to do it on your own, then you may not need it unless they require it. Your loan officer can explain and break down your specific amounts.
0 votes Thank Flag Link Wed Oct 10, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer