Reader Comments

LoanDepot Review

by Adams Smith (2019-02-15)

Now here's my situation. I'm in the process LoanDepot Review of finalizing my mortgage for buying my first home. (I have to make a decision by the end of this month). I got Good Faith Estimates from a number of lenders and all of them had $2000 - $2500 going towards the escrow account. so I assumed thats how it has to be. But then during a conversation with one mortgage broker, he asked me if I wanted to escrow my taxes and insurance. I then asked him if that will help me get a better rate or if there are any other advantages to an escrow account. He said that if I don't escrow the lender sometimes charges a quarter point. But I have checked this and most big banks and lenders don't really care either way. So I negotiated with the broker and he said that he is willing to "eat up" that quarter point.The major advantage of a mortgage escrow is that the lender assumes responsibility for paying your property taxes and homeowners insurance. This is also the major disadvantage. In addition, with an escrow the lender gets to keep the interest on your account.Many people don't want to get a big tax bill all at once. They prefer to pay a little bit every month and don't want the headache of paying it on time. Having said that, there have been cases where the lender failed to pay it on time causing an even bigger headache to the borrower.So what will I do I'm going to pass on the escrow account. For control freaks like me, I like to be in charge of paying my dues on time and not lose any interest on my money. There are 2 big advantages I see by not escrowing. One I pay less at closing, and two, I pay less every month. Of course I'll get a big tax bill, but I think I can handle that.