Does a Mortgage Escrow Account Pay Interest?
If you a regular reader of this blog, you probably read that I signed up for using an escrow account for my mortgage when I did my mortgage refinance a few months ago. This is the first time I've used an escrow account. I did it because I didn't want to pay the escrow waiver fee or give up the credit the lender offered to me for my trouble.
When you use an escrow account, you pay a few hundred dollars extra every month on top of your regular monthly mortgage payment. The mortgage servicer holds those money until your property tax and homeowners insurance bills come due. Then they use that money to pay the tax and insurance bills.
I was hoping the mortgage servicer would cancel the escrow account after the loan is sold and the servicing is transferred. But they said no. They won't close it unless I pay them a fee. I will just stick with it.
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