Generally, your mortgage payment consists of PITI - principal, interest, taxes and insurance.
If you choose to escrow, you allow the mortgage company to collect from you 1/12 of the annual taxes and insurance on the home every month as part of your payment. When the tax or insurance bills come due, the mortgage company pays those bills for you. Easy.
You may choose not to escrow and be responsible for saving and paying those bills yourself. During the year you could be collecting that money in an interest bearing account.
To decide which is best for you, consider whether you are the personality type to be organized and on top of it or if it's better to have someone else take over the responsibility for you. Just be sure to let your mortgage company know what your plans are at the beginning of the loan process.
If you have any other questions you may post here or email me at robin@robinscottrealtor.com
Homes sellers are also homebuyers. If you are in the Austin, Texas area and are planing to sell and/or buy a house, contact me for a FREE home market analysis and marketing plan or help finding and purchasing your new home. Robin Scott, REALTOR® 512.589.7988 or robinscottrealtor@gmail.com
Austin, Texas. Robin Scott, BROKER. Certified Residential Specialist, Accredited Buyer's Representative, Seller's Representative Specialist. 512.589.7988.
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