Question:

How to set up an escrow account?

Answer:

If you are a disciplined borrower, you may like to know how to set up an escrow account on your own. This may be possible to negotiate with lender if your LTV is 80% or less. Setting up an escrow account even if you are a low risk borrower is recommended to do. Many borrowers would simply want to put yearly tax and interest payments into an escrow account and forget about them, as it is a very convenient way to handle payments. However, responsible borrowers may like to open an escrow account on their own rather than let the lender have it.

Why is it good to know how to set up an escrow account on your own?

Even though lenders may open an escrow account on your behalf with the purpose of having property taxes and insurance be paid on time, it is still possible that they will make late payments and will incur fines for the borrower to pay.

If you think you will be better taking care of your escrow account, or be better off with an escrow company, making the payments for you, you may like to convince the lender you don't need an account with them.

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