What is a real estate escrow payment? Can I get a mortgage loan without one?

The %26quot;real estate escrow payment%26quot; is the portion of your principal, interest, taxes and insurance payment that is held in an escrow account until such time as the property taxes and the fire insurance renewal are due and payable. The lender pays these sums for you from that account.

An escrow account is normally required by the investor if the borrower makes less than a 20% down payment on the home.

If you put down 20% or more you are not required to have an escrow account.

Another popular way to avoid the requirement is to do a first mortgage at 80% and a second up to the amount you need.

Some portfolio lenders self insure and so will waive the requirement but expect higher rates to hedge the resultant risk.

What is a real estate escrow payment? Can I get a mortgage loan without one?

Usually, an escrow account is where the mortgage automatically takes care of other expenses involved with owning a house, such as property tax and home owner's insurance.

You can definitely get a loan without one, although under some particular circumstances it may be required or may be one of the conditions of the loan itself. (But there are plenty of loans available that don't require an escrow account.)

Personally, I have one, because it simplifies paying taxes and insurance for me (i.e. all that is automatic with my mortgage payment). On the other hand, I do lose a little money in interest since my lender gets to hold onto that money until it's needed.

What is a real estate escrow payment? Can I get a mortgage loan without one?

Escrow takes care of your insurance and taxes. I have my mortgage set up this way and it works really well especially for those of us on a budget.

What is a real estate escrow payment? Can I get a mortgage loan without one?

An escrow payment account is to assure the lender funds are available to pay critical expenses on the property. Those expenses are insurance, taxes and other assessments.

To get a mortgage without one you would need a minimum middle credit score of 700 or more. The value of the loan to the property of 79% or more. A reserve account of PITI (principal, interest, taxes and insurance ) of 3-6 payments.

The higher risk the property owner is to the lender the more chance an impound account (real estate escrow account) will be required.

If you can meet one or more of the above mentioned requirements you may not need an impound account.

Please contact me if I can assist you with answering more questions. I also do mortgage loans.

Chris C

Real Estate Broker/Lender

What is a real estate escrow payment? Can I get a mortgage loan without one?

If you do not want top escrow your taxes and home owners ins. then it can be waived but there usually is a cost from the bank of .20% - .25% of the loan amount.