Houston Mortgage Refinance: Should you bank escrow or self escrow?

Houston Mortgage Refinance: Should you let the bank escrow and have higher closing costs or self-pay them and reduce your closing costs?

When you refinance, you will get a refund from your current mortgage company for this year’s escrow balance. Normally, you get this 30 days after your new loan starts or the old loan stops. However, if you escrow the new loan and want to roll closing costs AND pre-pays into the new note, your loan amount will be higher. Therefore you’ll have a higher payment. Another option is coming to closing with your new escrow.

It’s important to remember why you’re refinancing in the first place… to lower your payment and/or principal interest as much as possible.

My suggestion is do a private escrow and get the best of both worlds. Consider refinancing without a bank escrow. Go to your bank and open a savings account that doesn’t have a debit card attached to it and have them auto transfer your monthly taxes directly to this property-tax saving’s account. This way you don’t have to raise your loan amount and since the bank is going to deposit your monthly taxes into a stand-alone account, you’ll never have to worry about your tax bill at Christmas time! Lower payment, never worry about your taxes, no stress.

Interested in taking advantage of the record low mortgage rates? Do you have unanswered mortgage refinance questions? Give us a call today!

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