Posted on: 28th Jan, 2008 04:53 pm
Is it common practice or a particular state requirement for a lending institution to charge to eliminate the escrow account?
I've never heard of that or attempted to do it. When I got my loan I chose not to have ins. and taxes escrowed so that I could shop for ins. every year on my own. Everyone needs to review their ins. every year. It's not uncommon for lending institutions to have rediculous hidden fees.
Fisherjohn,
It is not ucommon for lenders to charge fees while eliminating escrows.
Escrow gives the lender an assurance that you're paying for taxes and insurance premiums. It implies that you have cash reserves to pay for taxes and insurance. That's how the escrow payments are calculated so that you have some extra cash in the account which can compensate for in case you don't have funds for the mortgage payment.
It is not ucommon for lenders to charge fees while eliminating escrows.
Escrow gives the lender an assurance that you're paying for taxes and insurance premiums. It implies that you have cash reserves to pay for taxes and insurance. That's how the escrow payments are calculated so that you have some extra cash in the account which can compensate for in case you don't have funds for the mortgage payment.
If it is not in the contract, don't pay it.
