2007-04-13 03:40:53 · 4 answers · asked by Kimberly E 1 in Business & Finance ➔ Renting & Real Estate
Does RESPA require borrowers to maintain an escrow account?
NO. It is the lender's decision whether the borrower must maintain an escrow account for the purpose of paying taxes and other items. The HUD regulations only limit the maximum amount that a lender can require a borrower to maintain in an account.
RESPA does not require lenders to impose an escrow account on borrowers; however, certain government loan programs (for example, FHA and VA loans) or lenders may require escrow accounts as a condition of the loan.
If you have a Conventional Loan and you do not have PMI (Private Mortgage Insurance), you have the option to close your escrow account and make your own tax and insurance payments. If you have a VA or FHA loan, the maintenance of an escrow account was a condition for the funding of your government-insured loan. In this case, the escrow account cannot be waived or altered.
2007-04-13 20:36:04 · answer #1 · answered by Anonymous · 0⤊ 0⤋
If you are speaking of paying your insurance and taxes with your principal and interest for a FHA and VA loan that is a requirement.
This requirement remains until you refinance into a conventional loan. with around 80% loan to value you have a choice of having a escrow account or not.
Even now some lenders will charge you a .125% or.25% if you do not open an escrow account.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-04-14 19:01:53 · answer #2 · answered by Skip 6 · 0⤊ 0⤋
I don't know with 100% certainty, but I think that you do - based on my experience. In 14 yrs selling in San Antonio, (with about half my clients going FHA) I have had ZERO people not have an escrow while doing an FHA loan.
Careful about responding to people who say "I have something for you, and it's just as good as FHA." If they don't have a license to do FHA, they have no incentive to get you the best loan - also, getting their FHA "Eagle" is hard for a mortgage company and having it shows ability and stability. The best loan for you MIGHT be something other than FHA, but go to someone who offers you options.
2007-04-13 11:32:30 · answer #3 · answered by teran_realtor 7 · 0⤊ 0⤋
Your loan officer should be able to tell you. I had always thought escrow was needed until you got a certain percentage of the mortgage paid off. I'm not positive though.
2007-04-13 10:54:27 · answer #4 · answered by suzieq_64093 4 · 0⤊ 0⤋