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How to Save Money on Escrow

Ever since I was a kid I was brought up to be frugal and to save and budget money. * Disclaimer: I am not a financial planner.

How to Save Money on Escrow


... So if you don't want to pay higher rates than necessary, or if you're considering refinancing your mortgage and need to keep your payments low enough to qualify for new financing terms, read on! We've got some tips for how homeowners can maximize what they keep in their escrow accounts each month—and how they can use that extra cash while still keeping their homes protected and covered by insurance.

Shop for a mortgage company

The first step to saving money on escrow is to shop for a mortgage company that offers competitive rates. The second step is to find a mortgage company with a good reputation and good customer service record. The third step is to look for one with a good track record helping people with bad credit get mortgages.

The last thing you want is for your home purchase or refinance loan application process to fall apart because of an incompetent, unprofessional or otherwise untrustworthy mortgage broker that doesn't know what they're doing!

Get an Independent Appraisal

While the appraisal is not necessarily a fun process, it's crucial to getting your mortgage loan. To get an estimate of value, most lenders require you to pay for an independent appraisal. Your lender can't use their own property evaluation because that would be biased in their favor.

The appraisal will set the amount of your mortgage and escrow, which can help save you money on closing costs down the road. If you have any questions about this process or want more information about how to get started with purchasing a home, feel free to reach out!

Pay your taxes and insurance before escrow adjusts

  • If you pay your taxes and insurance before the escrow adjusts, you will be able to reduce your escrow payment. This is because the lender will not have to send more money when they give you a tax deduction after the first of the year. It’s important that you don’t forget this step because otherwise, it might take longer than expected for your loan to close.
  • You can ask the lender if they can pay taxes and insurance for you in advance so that there will be no delay between closing on a house and receiving those funds back from them. It may take a few weeks, but it’s worth asking because otherwise, it could make things difficult financially if those funds weren't received immediately after closing (especially if those payments are late).

Increase the size of your down payment

The best way to save on escrow is to increase the size of your down payment. This might sound obvious, but it's not always possible—especially if you're new in town. Some lenders will only lend up to 80 percent of the value of a home or property, so even if you have enough cash on hand for a larger down payment, that may not be enough for qualified financing. If this is the case for you, check out other ways to boost your savings by reading our article on how much should I save before buying a house?

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You can save money on your escrow with a little planning.

Escrow accounts are a way for lenders to keep funds safe and secure until they are ready to pay other people. In an escrow account, you put money that you owe on your mortgage. For example, if you have a $300 monthly payment due in January but don't need the money until February 1st, then putting it into an escrow account will help ensure that when the time comes to make your payment, you'll have enough cash on hand.

So what's an escrow adjustment? It's basically just an adjustment made by banks or other financial institutions in regards to how much money they keep back from your monthly payments each month (or quarter). This can be adjusted depending on various factors like property taxes and insurance rates changing over time; however it's usually done automatically by the bank once per year without any action needed from homeowners themselves unless there is something unusual going on with their finances during that time period which would warrant re-evaluation of what percentage should be withheld each month/quarter based on projected needs versus current balance available before making any withdrawals required later down line under standard rules set forth priorly agreed upon by both parties involved--which means if someone owes more than expected then must simply wait until next cycle where again review process repeats itself again stapled onto end days credit card statements (if applicable), etcetera...


Escrow is a great tool for homeowners and investors, but it can also be a source of frustration. The good news is that there are ways to save money on escrow in your home or investment property without having to compromise on quality. We hope this article has given you some ideas on how to keep costs down when buying or selling real estate!


This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2022 Shanon Sandquist

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