Madison MoneySports - Personal Finance Thread

[JPolen01]

Yeah, we paid PMI for a few years when we wouldn't have otherwise been able to get into a home. Down payment was only 5%, but since then the value of the home has gone up 39%. We refi'd 4 years later when our loan to value was enough to get out of PMI and opted to get out of escrow (paying taxes and insurance separately).

What's the benefit of that? i'm still in escrow for my insurance and taxes.

Monetarily there is no benefit. Escrow requires that a certain balance is carried through out the year, so if you fall below that threshold they adjust the mortgage payment the following year. When we had escrow the property taxes went up enough for us to fall below that threshold, so they raised our mortgage $300 more per month the following year.

Now the mortgage is fixed (principal/interest) and I budget in the annual property taxes due twice a year and pay that directly to the county. It also allows me to 'feel the pain' of taxes and insurance. It also made me realize that my insurance went up a LOT since we bought our house so I switched companies and saved about $1200/yr.

TLDR; with no escrow I'm more financially aware of the costs.

That's a good reason to get out of escrow. I need to look into this.

I don't really see how. If you pay attention to the cost of your homeowner's insurance it's a non issue. You have no control over taxes. Now if you want you take your escrow money and invest it, I guess I could see a benefit if your making a safe investment. I wouldn't take that gamble myself. Escrow is the easy button to get all the stuff paid on time.


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