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Old 06-01-2018, 09:15 AM
 
356 posts, read 241,925 times
Reputation: 343

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Im looking to buy my first home, I have a 750 credit score (per lenders credit pull).

I have a 2017 $30k car that I pay taxes on yearly, and pay them when they are due. I have done this for all my cars. In fact, I own multiple cars.

So why the HELL are they nickel and diming me to put money into an "escrow" each month as part of the payment? Its unnecessarily inflating the monthly cost, causing DTI issues.

I obviously can pay the $500 annually just like I pay my car taxes when they are due.

Any way to stop them from pulled this childish garbage? Its like you trust me to pay $650 a month but not the $500 annual tax fee?? wtf?

Not to mention they included $14 for a "Credit report" in the loan estimate. Over my dead body im paying that. I will walk away.
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Old 06-01-2018, 09:25 AM
 
Location: Rochester, WA
3,832 posts, read 2,053,214 times
Reputation: 10577
Because the bank, as the primary lienholder, does not want to end up with a tax lien on the house if it doesn't get paid... and they will probably also require that your homeowner's insurance is paid through that escrow also, because they don't want to risk it being uninsured.

It's the way it is, with most mortgages.

If your total tax bill is only $500 a year, it's not increasing your monthly costs that much. Your homeowner's policy may run about the same?

$14 for a credit report is no reason to walk, really! This is part of the cost of buying a house with someone else's money. They need to protect their investment too.
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Old 06-01-2018, 09:29 AM
 
95 posts, read 39,014 times
Reputation: 48
you can choose to go without an escrow account if you opt for a conventional (non-FHA, non-VA) loan.

In certain circumstances, you can opt out of an Escrow account with a VA or FHA loan, but in my experience this is rare.

PM if you'd like to delve a bit deeper into this subject, I'm a wealth of free knowledge as I am a licensed mortgage consultant.
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Old 06-01-2018, 09:30 AM
 
95 posts, read 39,014 times
Reputation: 48
also, many lenders charge a small premium (either in the cost of the loan or with a .125% increase to the rate) if you opt to decline an escrow account.

Many, but not ALL. Some will not penalize you at all for paying your taxes and insurance on your own, without an escrow account.
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Old 06-01-2018, 09:33 AM
 
2,393 posts, read 4,860,508 times
Reputation: 4511
If your downpayment is large enough escrow will be optional. Ask your bank.



And if you don't like the fees a 100% cash purchase is always OK.
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Old 06-01-2018, 09:35 AM
 
10,270 posts, read 6,500,789 times
Reputation: 10847
Quote:
Originally Posted by juggar View Post
Im looking to buy my first home, I have a 750 credit score (per lenders credit pull).

I have a 2017 $30k car that I pay taxes on yearly, and pay them when they are due. I have done this for all my cars. In fact, I own multiple cars.

So why the HELL are they nickel and diming me to put money into an "escrow" each month as part of the payment? Its unnecessarily inflating the monthly cost, causing DTI issues.

I obviously can pay the $500 annually just like I pay my car taxes when they are due.

Any way to stop them from pulled this childish garbage? Its like you trust me to pay $650 a month but not the $500 annual tax fee?? wtf?

Not to mention they included $14 for a "Credit report" in the loan estimate. Over my dead body im paying that. I will walk away.
If you don't understand the home buying process you should not buy one, or wait until you can buy one with cash.

A mortgage is a large loan. They can't just trust you to pay your taxes or insurance.

and guess what and this will drive you crazy.

Not only do you have to pay it monthly. You have to pay a whole years taxes up front.

and not only taxes but property insurance too.

and HOA fees if there are any.

Oh and they can go up too if the taxes or insurance were calculated too low becuase of what the previous owner was paying. So your monthly payment can go up too. The escrow portion can go down too, if you live in a state like Florida when the homestead exemption kicks in. Also if you do live in Florida or a hurricane prone area and get a wind mitigation report afterwards or get shutters for all your windows it can go down too.

If you are worried about $14 you can't afford a home or it will drive you crazy there are a lot of other fees too, surveys, inspections, appraisals, document fees, etc.
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Old 06-01-2018, 09:36 AM
 
356 posts, read 241,925 times
Reputation: 343
Quote:
Originally Posted by Diana Holbrook View Post

$14 for a credit report is no reason to walk, really! This is part of the cost of buying a house with someone else's money. They need to protect their investment too.
I understand they need to protect their interest, but its literally only $500. Like, seriously? It really should be based on credit score whether or not one needs to put $500 into escrow....

I find it honestly offensive they would attempt to charge me $14 for a damn credit report. Mind you, I get these free from Discover and many other credit cards. The dealership doesn't charge me for this either, they know its the cost of doing business.
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Old 06-01-2018, 09:37 AM
 
356 posts, read 241,925 times
Reputation: 343
Quote:
Originally Posted by LMC White Collar View Post
you can choose to go without an escrow account if you opt for a conventional (non-FHA, non-VA) loan.

In certain circumstances, you can opt out of an Escrow account with a VA or FHA loan, but in my experience this is rare.

PM if you'd like to delve a bit deeper into this subject, I'm a wealth of free knowledge as I am a licensed mortgage consultant.
Its a USDA guaranteed loan, is it possible to opt out of this?
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Old 06-01-2018, 09:39 AM
 
10,270 posts, read 6,500,789 times
Reputation: 10847
Quote:
Originally Posted by juggar View Post
I understand they need to protect their interest, but its literally only $500. Like, seriously? It really should be based on credit score whether or not one needs to put $500 into escrow....

I find it honestly offensive they would attempt to charge me $14 for a damn credit report. Mind you, I get these free from Discover and many other credit cards. The dealership doesn't charge me for this either, they know its the cost of doing business.
If it's "only" $500 what's the big deal? it will be there in your account and collected monthly and set aside securely and you don't have to worry about it.
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Old 06-01-2018, 09:40 AM
 
10,270 posts, read 6,500,789 times
Reputation: 10847
Quote:
Originally Posted by juggar View Post
Its a USDA guaranteed loan, is it possible to opt out of this?
O% down, I doubt it.
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