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Odds are you could have received a reduction in your closing costs equal to .25% of the loan amount (i.e. $500 on a $200k loan) if you would have opted to escrow.
We didn't even talk about it until AFTER the rates were set.
So as far as they knew, we were doing an escrow account.
Both times.
To say it is a rip off, is like saying interest is a rip off. It is the cost to borrow money. If you don't want to pay for interest, cost , fee, insurance, then pay all cash. In most places, you'll still have to pay a property tax, another 'rip off' based on a value controlled by others who have bought at a higher price than you.
No. It is not.
I pay interest as a fee for borrowing money. I do so gladly and do not think paying a fee to use someone else's stuff is a rip off.
That's a terrible comparison.
As a homeowner, I am obliged to pay home insurance and property taxes.
What does that have anything to do with interest or borrowing money?
I will pay it myself. That is my obligation. I am not borrowing anything to pay it.
Property taxes are not a rip off in my mind and should be studied prior to entering the market to decide if you think it's worth it.
Let's call it what it is - punitive. It's a punitive action because of some bad apples.
Well, unless your loan is going to be a portfolio loan (meaning it won't be sold) where escrow are optional, you now have the pleasure of paying a LLPA (loan level price adjustment) to pay your own taxes an insurance. And, you can say you don't want the mortgage unless they waive the fee, to which their answer must be, "I am sorry, all pricing is now required to be equal to all across the board, we cannot waive the fee for you and not for others. "
Welcome to the new mortgage world, we have a new sherriff in town that's going to make sure no one gets special deals or exceptions. In the past, where we could give a one day lock extension due to an emergency, well, not going to happen. Just like where we could waive a fee to not escrow, not happening.
Then odds are I would say your lender had enough 'fat' in the deal to 'eat' the .25% charge.
Lol, that was my exact thought. I know plenty of outfits that don't offer the best possible rates, so when the STANDARDIZED LLPA for escrow waiver comes along, it's not a problem. Just like the lock that needs an additional week. They just happened to have it priced in the loan and now they are the hero.
Funny thing CFPB ain't gonna like that no more. Everyone is going to have to be the same for the same score & down payment. No one will feel special any more.
On my rate sheets, the escrow waiver has a very small price hit, not enough to raise your interest rate. I would ask for that.
The Title company agent should instruct you at closing on when your first payment is due and who it is due to.
If you are working with a broker - your payment will initially go to the lender they matched you with. The lender might service your loan or re-sell it.
If you are working with a corresponding lender/broker - you payment might initially go to the broker, and then they will sell your loan (usually as quick as possible).
If you are working with a bank - you payments will go to them, until they decide to sell your loan. A lot of times they will hold on to your loan and service it (more $$ for them).
I see no reason for your loan officer to disengage after closing, unless they do not want repeated business. He/she will have little authority to do anything, but can lead you into the direction of people with answers.
Don't worry too much over this. Make your payments before the due date and always keep proof. When your loan (or the servicing rights) gets sold , you will receive one written notice from the old servicer and one written notice from the new servicer. By law, you will have a 60 day transition period in which you can make payments to either one.
Escrowing vs Not escrowing are different for everyone. Some like to escrow because they dont have to set aside the extra money instead they spend it. Some others don't escrow so they can get interest off that money (some good that is doing right now)
My saying. not escrowing is awesome.. except when i have to pay my homeowners insurance bill for the year or my taxes. Anyway you look at it it is all a wash. I would reccommend someone escrowing until they get use to owing a home so they dont have to come up with the extra money.
Some of my lenders charge to not escrow and some don't. Either way you have to escrow if it is FHA. A conventional loan would require 20% down to have the option.
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