How to remove escrow account from mortgage

To remove an escrow account from your mortgage, you’ll need to follow a few steps. Here’s the general process:

1. Check your mortgage agreement: Some loans require you to have an escrow account, especially if your down payment is below a certain threshold (e.g., 20%). Make sure your loan allows for the removal of the escrow account.
2. Ensure you have 20% equity: Lenders usually require you to have at least 20% equity in your home before they will allow you to remove the escrow account. You can calculate this based on the current market value of your property and the remaining mortgage balance.
3. Contact your lender: Reach out to your mortgage servicer or lender to request the removal of the escrow account. Some lenders may have a specific procedure for this, including filling out a form or making a formal request.
4. Request an escrow waiver: If your lender allows it, you may need to request an escrow waiver. This will allow you to pay your property taxes and homeowners insurance directly instead of through the escrow account.
5. Wait for approval: Your lender will review your request. If they approve it, they’ll remove the escrow requirement and adjust your monthly payment.
6. Pay your taxes and insurance on your own: After the escrow account is removed, you’ll be responsible for paying your property taxes and homeowners insurance premiums directly to the appropriate agencies. You may also be required to provide proof of payment to your lender.
7. Watch for changes in your mortgage payments: Without an escrow account, your monthly payment will no longer include those additional escrow charges, which could lower your payment. However, keep in mind that you’ll need to manage your tax and insurance payments independently.

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If you’re unsure whether your loan qualifies or need help navigating the process, it’s a good idea to consult with your lender or a financial advisor. You can contact our lenders here.

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