Posted on: 28th Feb, 2010 01:27 pm
I want to pay my own taxes and insurance. Lenders want to charge an escrow fee (around $500) to NOT escrow. Do they have to charge this?
Lenders want to bank that escrow money. They also want to be SURE the taxes are being paid because if there is a tax lien, that gets paid off during a foreclosure before the mortgage. Sometimes there is little to not fee when you do not escrow taxes and insurance. Sometimes there is a difference in the rate of 1/8. I try help my customers avoid those charges whenever possible.
[Link deleted as per forum rules. Thanks.]
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They will either charge you am upfront fee (which usually costs .25%) or increase the interest rate by an eigth. In your case, they're charging you upfront.
