Should i opt out of escrow with wachovia?

[cdelena]

I chose not to allow the servicer run escrow not because of cost but because they are very often incompetent. I have had five mortgages and 4 out of 5 companies screwed up in the escrow / payment process at least once. It has been a real pain and very costly in one case so I will not trust the mortgage servicer with my funds again. Rather than pay a higher rate you can often opt out with a fractional point or fixed charge up front.

[dad2jules]

Originally Posted by hoopingkld

Hello,

Can anyone help me with opting out option of mortgage when refinancing?
The loan officer told me that we can't opt out of escrow unless we pay a higher interest rate than what she quote us.

Where can i find the information? I appreciate your helps on this a lot

If you qualify to opt out all lenders I know of charge .25% for this. You can opt out and waive this fee by an increase in rate- usually .125%.

[annerk]

If you are really disciplined with your finances, there's no reason to have an escrow if you can avoid it. But, if you aren't really, really, really disciplined at saving money, it's a great way to get yourself into a huge financial mess. I have my accounts set up so that each month when I pay my mortgage, an amount equal to 1/12th of my property taxes and insurance automatically transfers from my checking account to a savings account where it sits until the tax or insurance bill is due. It's an automatic transfer, and I treat it as if it were a bill. That savings is only used for the taxes and insurance, and seperate from my other savings.

I can't imagine not being almost fanatical about the savings should you opt out of escrow, and then having to come up with the taxes at the end of the year. It's a substantial amount to have to withdraw from your regular or emergency savings, or come up with if you don't have savings.

The nice part is that I make about $200 a year in interest. I just leave that money in the account and think of it as a cushion to fall back on should my taxes or insurance go up.