Do you pay your real estate taxes yourself or allow it to be paid out of the escrow account in your mortgage?

Question

I'm wondering if there is any advantage to budgeting the money to pay our taxes ourselves instead of including it in our mortgage payment each month in order for the mortgage company to pay them, which they do on a quarterly basis.

Answer 1

I have done it both ways. For me it is better to have an escrow account because it is the best way for me to budget.

Mathematically it is best and business-wise it is best to hold your own money and not have the mortgage company hold it. You will be able to gain interest and when you write the check for the insurance it reminds you to check and see if the policy is up to date in coverage and value for cost. It also reminds you to protest the property taxes if they are out of line.

I just couldn't force myself to set the money aside each month.

Answer 2

If you can put the money aside yourself, the advantage would be that you collect the interest onhtis money while it sits in the bank. The advantage of having an escrow company pay the taxes is that you do not have to worry about budgeting for this on your own.

Ultimately, regardless of if you do this through an escrow company or not, you are responsible to make sure that theses taxes are paid. The assessor will come after you if they are not paid.

Answer 3

I've done it both ways. I prefer to manage my own taxes and insurance instead of leaving money in the hands of the mortgage servicing company interest free.

Some lenders are willing to let customers with long, stable credit histories manage their own taxes and insurance and will waive escrow. I've been doing it this way for a number of years now and managing my own expenses is now a requirement if a lender wishes to have me as a customer.

Answer 4

We pay ours ourselves and it works for us because we actually do put the money aside, the other reason is that the bank or mortgage company will keep usually an additional amount over and above the taxes due to cover any increase in amount.

Answer 5

I pay taxes myself, because I invest the money that would normally be escrowed with the goal of using the Interest earned to pay the taxes.

Answer 6

I have done it both ways, but I also let the mortgage company handle it. Although my property taxes aren't very high, it is tough for me to write that check as we are planning holiday travel, gifts, parties and such.

I think part of it is that I hate writing that check, period.