How to Get Rid of My Escrow Account
- 1). Review your current mortgage balance, and compare it to the current estimated value of the property. You may have to hire a Realtor or appraiser to accurately value the house.
- 2). Determine whether your current balance owed divided by the current value is less than 75 percent. This is the figure mortgage lenders often use when deciding whether you're eligible to remove the escrow requirement on a loan.
- 3). Check your history of payment with the lender. If you were late on a payment even once, this could cause the lender to deny your request to close the escrow account.
- 4). Call your lender to express your desire to get rid of the escrow account so that you can pay the insurance and taxes on your own. You may have to submit the request in writing and provide a compelling reason for wanting to close the account, because it benefits the lender to keep the account open. The lender considers the loan-to-value ratio (LTV) you determined in the second step, your payment history, the type of loan and other details to make a decision.
- 5). Abide by the decision of the lender. If the lender agrees to get rid of the account, you may have to pay a fee. You may also have to wait until all taxes and insurance payments have been made for the year. If denied, continue to make mortgage payments on time, including the escrow amount. Reduce your balance more and maintain a positive payment history. You can resubmit your request in the future or refinance the loan to get out of the escrow requirement.
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