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Thread: Escrow or no?

  1. Quis custodiet ipsos custodes?
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    #1

    Escrow or no?

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    So for those of you that are homeowners, do you put the funds for your property taxes and homeowner's insurance in an escrow account and have it paid automatically? Or do you just write yearly checks for when those bills come due?

    I've always used an escrow account and we decided to do the same with this new house ... but I was also thinking about why someone wouldn't and the only thing I could really think of was earning more interest on that money instead of having it sit in the escrow account all year. Also I remember reading "horror stories" about people's escrow accounts being away off and them having to write substantial checks when taxes came due. Ours generally overpays, like every once in a while I'll get a check for $100 or so. So I guess that's some money that I could have been using elsewhere if I paid things myself ...

    On the other hand it's nice to have everything taken care of for me automatically, but maybe that's me being lazy.

    Anyway which do you do and why?
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    #2
    We have never escrowed. Having that money in our accounts allows us to earn some interest on it (or would allow someone to pay off debt and not accrue additional interest). Escrow is good if you aren't organized enough with your finances to make sure you have the money and remember to pay those bills, but financially it doesn't make sense.
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    #3
    i think we do it that way!
  4. Quis custodiet ipsos custodes?
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    #4
    Quote Originally Posted by villanelle View Post
    We have never escrowed. Having that money in our accounts allows us to earn some interest on it (or would allow someone to pay off debt and not accrue additional interest). Escrow is good if you aren't organized enough with your finances to make sure you have the money and remember to pay those bills, but financially it doesn't make sense.
    So for your property taxes, where do you get the estimate for how much money to put away? Do you use the last year's figures?
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    #5
    Quote Originally Posted by Tojai View Post
    So for your property taxes, where do you get the estimate for how much money to put away? Do you use the last year's figures?
    We use last years figures, with a small bump. In CA, property taxes are limited in how much they can increase every year, so we never have to worry about huge increases. For areas that can increase wildly, I would see if you can contact the county assessor (or whomever is in charge of property taxes) for an estimate each year.
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    #6
    We didn't have an option to not use an escrow. I would prefer not to since I would rather write the check myself and know for sure it got paid. I also know our escrow numbers wont be right since the taxes are based off the homestead rate which we wont qualify until next year.
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    #7
    Escrow. Makes it easier and makes sure there is enough put aside.
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    #8
    We use escrow (I think, it's part of our monthly payment and gets put aside until taxes are due). Mostly because we're lazy, we'll change it eventually. We've also discussed not having any taxes set out of DH's pay check so instead of a return we just pay the amount we actually owe. Hopefully we'll get on top of it the next few years. Until then it's easier this way. I think we owed around $30 last year at the end, since we bought when property was at it's lowest and it's been going up. I'll be interested to see this years.
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    #9
    I have escrow. I didn't realize that it was an option. Is this something that they ask you when go through the process? I'm pretty sure I was never given a choice.





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  10. Quis custodiet ipsos custodes?
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    #10
    Quote Originally Posted by villanelle View Post
    We use last years figures, with a small bump. In CA, property taxes are limited in how much they can increase every year, so we never have to worry about huge increases. For areas that can increase wildly, I would see if you can contact the county assessor (or whomever is in charge of property taxes) for an estimate each year.
    That's a good idea! I don't know what the laws in Texas are like but I'm sure I could contact the assessor and ask. I might do that after we get our other house sold. Do you keep a separate account for the money that is earmarked for those expenses?

    Quote Originally Posted by KarmaRocks View Post
    I have escrow. I didn't realize that it was an option. Is this something that they ask you when go through the process? I'm pretty sure I was never given a choice.
    Hmm maybe it depends on the state? Both times I bought a house (TX each time) it was part of the homebuying process. My parents have lived in IL and MO and they said they were given a choice each time too.
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