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MrsS2005
Mom of 3
Member since 11/05 13118 total posts
Name:
B
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Escrow and attorney questions
I was under the impression that if you put 20% down you don't have to escrow your taxes. We just looked at a mortgage through TD Bank NA. They charge .25% of the mortgage if you don't want to excrow. Is that normal? Is it worth it to pay extra to not escrow the taxes and insurance?
Just a little background: we're in CT so the RE process works a little differently. The initial offer is a signed standard RE contract. We can go back and forth on the numbers, but once the sellers agree to a price, they sign the contract. We're in contract as soon as the sellers sign. The attorneys only get involved after the contract is signed.
The bank has a list of attorneys they use for the closing. I guess we can either use their attorney for everything (closing and title search) or we can get our own attorney for the title stuff. Does it make sense to have 2 attorneys?
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Posted 10/3/08 11:28 AM  |
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Katie111806
Team Pink!
Member since 12/06 5349 total posts
Name:
Katie
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Re: Escrow and attorney questions
I've never heard of a fee to choose not to escrow when you have 20% but our loan required escrowing so we didn't look into this too much. And, we only used one lawyer.
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| Posted 10/3/08 12:12 PM |
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MrsS2005
Mom of 3
Member since 11/05 13118 total posts
Name:
B
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Re: Escrow and attorney questions
Posted by Katie111806
I've never heard of a fee to choose not to escrow when you have 20% but our loan required escrowing so we didn't look into this too much. And, we only used one lawyer.
I thought that was strange too. Did you use the bank's attorney or get your own? I think TD Bank requires you to use someone on their list for the closing, but we have the choice to get our own for the title search.
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| Posted 10/3/08 12:16 PM |
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MommyTeffi
Yummy!!!
Member since 2/06 1827 total posts
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Re: Escrow and attorney questions
We bought in CT and only used one attorney. As far as the mortgage question, I have no idea since we paid cash.
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| Posted 10/3/08 12:22 PM |
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Katie111806
Team Pink!
Member since 12/06 5349 total posts
Name:
Katie
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Re: Escrow and attorney questions
Posted by MrsS2005
Posted by Katie111806
I've never heard of a fee to choose not to escrow when you have 20% but our loan required escrowing so we didn't look into this too much. And, we only used one lawyer.
I thought that was strange too. Did you use the bank's attorney or get your own? I think TD Bank requires you to use someone on their list for the closing, but we have the choice to get our own for the title search.
Huh, our bank didn't require we use one of their attorneys either. We hired our own attorney for the title and closing.
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| Posted 10/3/08 12:22 PM |
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MrsS2005
Mom of 3
Member since 11/05 13118 total posts
Name:
B
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Re: Escrow and attorney questions
Posted by Katie111806
Posted by MrsS2005
Posted by Katie111806
I've never heard of a fee to choose not to escrow when you have 20% but our loan required escrowing so we didn't look into this too much. And, we only used one lawyer.
I thought that was strange too. Did you use the bank's attorney or get your own? I think TD Bank requires you to use someone on their list for the closing, but we have the choice to get our own for the title search.
Huh, our bank didn't require we use one of their attorneys either. We hired our own attorney for the title and closing.
Well, at least they locked us in at a pretty good rate. We're not obligated to go with them, but since they have a good rate, it's very tempting to use them. I don't know why they have these stupid rules though that no other places seem to have. 
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| Posted 10/3/08 12:36 PM |
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Kara
Now Zagat Rated!
Member since 3/07 13217 total posts
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They call me "Tater Salad"
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Re: Escrow and attorney questions
Different lenders have different policies about escrow. Many won't allow first time home buyers to escrow, even if they do put down 20%. Some do - mine did, but we bought in '07 and things were a little bit different then.
It's common for lenders to charge a fee for you not to escrow. I believe we paid one (just a couple hundred dollars, I think...)
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| Posted 10/3/08 12:57 PM |
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Kara
Now Zagat Rated!
Member since 3/07 13217 total posts
Name:
They call me "Tater Salad"
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Re: Escrow and attorney questions
Posted by MrsS2005
The bank has a list of attorneys they use for the closing. I guess we can either use their attorney for everything (closing and title search) or we can get our own attorney for the title stuff. Does it make sense to have 2 attorneys?
Get your own attorney. There are generally 3 attorneys involved - bank's attorney, your attorney, and the seller's attorney.
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| Posted 10/3/08 12:57 PM |
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MrsS2005
Mom of 3
Member since 11/05 13118 total posts
Name:
B
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Re: Escrow and attorney questions
Posted by Kara
Posted by MrsS2005
The bank has a list of attorneys they use for the closing. I guess we can either use their attorney for everything (closing and title search) or we can get our own attorney for the title stuff. Does it make sense to have 2 attorneys?
Get your own attorney. There are generally 3 attorneys involved - bank's attorney, your attorney, and the seller's attorney.
I was leaning towards getting my own just in case the closing process doesn't go smoothly.
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| Posted 10/3/08 1:07 PM |
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MrsS2005
Mom of 3
Member since 11/05 13118 total posts
Name:
B
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Re: Escrow and attorney questions
Posted by Kara
It's common for lenders to charge a fee for you not to escrow. I believe we paid one (just a couple hundred dollars, I think...)
The advantage to not escrow is so we don't have to put as much money up front when we close and we can leave it in an interest bearing account, which presumably has a higher interest rate than the escrow account. Is there any other advantage to not escrow? I'm just trying to figure out whether it's worth paying .25% of the mortgage to avoid escrow.
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| Posted 10/3/08 1:10 PM |
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Kara
Now Zagat Rated!
Member since 3/07 13217 total posts
Name:
They call me "Tater Salad"
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Re: Escrow and attorney questions
Posted by MrsS2005
Posted by Kara
It's common for lenders to charge a fee for you not to escrow. I believe we paid one (just a couple hundred dollars, I think...)
The advantage to not escrow is so we don't have to put as much money up front when we close and we can leave it in an interest bearing account, which presumably has a higher interest rate than the escrow account. Is there any other advantage to not escrow? I'm just trying to figure out whether it's worth paying .25% of the mortgage to avoid escrow.
We didn't escrow b/c we wanted to earn interest on our money before tax payments instead of having it just sit with our mortgage lender. We also wanted to avoid corrections to our escrow (i.e., our taxes go up so our mortgage payment goes up or you need to send a larger sum to make up for an escrow shortfall or something like that). We're very good (some might say "anal") with money so making sure we had the cash on hand for quarterly mortgage payments isn't an issue for us.
We also didn't have to pay as much money up front. Had we escrowed, we'd have had to escrow several months worth of taxes (possibly close to a year's worth based on when we closed)... For us the fee was worth it. For others it may not be. Some people really like the convenience of not having to worry about quarterly tax payments.
HTH
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| Posted 10/3/08 2:00 PM |
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MrsS2005
Mom of 3
Member since 11/05 13118 total posts
Name:
B
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Re: Escrow and attorney questions
Posted by Kara
Posted by MrsS2005
Posted by Kara
It's common for lenders to charge a fee for you not to escrow. I believe we paid one (just a couple hundred dollars, I think...)
The advantage to not escrow is so we don't have to put as much money up front when we close and we can leave it in an interest bearing account, which presumably has a higher interest rate than the escrow account. Is there any other advantage to not escrow? I'm just trying to figure out whether it's worth paying .25% of the mortgage to avoid escrow.
We didn't escrow b/c we wanted to earn interest on our money before tax payments instead of having it just sit with our mortgage lender. We also wanted to avoid corrections to our escrow (i.e., our taxes go up so our mortgage payment goes up or you need to send a larger sum to make up for an escrow shortfall or something like that). We're very good (some might say "anal") with money so making sure we had the cash on hand for quarterly mortgage payments isn't an issue for us.
We also didn't have to pay as much money up front. Had we escrowed, we'd have had to escrow several months worth of taxes (possibly close to a year's worth based on when we closed)... For us the fee was worth it. For others it may not be. Some people really like the convenience of not having to worry about quarterly tax payments.
HTH
Thanks Kara.
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| Posted 10/3/08 2:25 PM |
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