Should I escrow taxes and insurance?
Escrows can feel like an annoyance—or a helpful safety system.
The right choice depends on how you budget, your risk tolerance, and whether the loan allows an escrow waiver.
What escrow is
An escrow account collects monthly amounts for property taxes and homeowners insurance.
The servicer pays those bills when due so you don’t have to save separately.
Pros of escrowing
Simplifies budgeting: one predictable monthly payment.
Reduces the risk of missing a tax or insurance due date.
Some borrowers prefer a built-in safety system.
Cons of escrowing
Payment can change when taxes or insurance change.
Escrow shortages/surpluses can create surprises.
Some borrowers prefer full control and to self-manage reserves.
When waiving escrow can make sense
You have strong financial discipline and prefer control.
You maintain a separate tax/insurance reserve account.
Your loan program allows it (often with sufficient equity and credit).
Example scenario
A homeowner with strong reserves may prefer paying taxes/insurance directly.
A homeowner with variable income may prefer escrow to avoid large lump-sum bills.
Either can work if you avoid payment shock and missed due dates.
Guidance
We confirm whether escrow waiver is allowed under the program and pricing.
Then we decide based on your budgeting style and reserve plan.
Quick explanation from Steve
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Next step
Request a Strategic Refinance Review
If a question comes up while you’re reading, ask Steve247 using the chat in the corner of the page.
FAQ
Can I remove escrow later?
Sometimes. Some servicers allow it if guidelines are met, but it depends on loan and investor rules.
Does waiving escrow change my interest rate?
It can. Some programs price for escrow waiver. We show the trade-off clearly.
Why does my escrow payment change each year?
Taxes and insurance can change, and the servicer recalculates the required monthly amount to keep the account funded.
If I don’t escrow, what should I do instead?
Set up a dedicated reserve account and automate monthly transfers so funds are ready when bills come due.
About Steve Combs
Steve Combs is a mortgage strategist focused on helping buyers and homeowners make clear, confident mortgage decisions across Southern Maryland, Washington DC, Northern Virginia, and the Annapolis / Anne Arundel area. He is registered to lend in 46 states and the District of Columbia and has been quoted in The Washington Post. The goal of this site is simple: make mortgage decisions feel clear—not overwhelming.