Thursday, February 09, 2006

Mortgage Escrow Account

In February of last year, we bought our current home and established an escrow account through our mortgage provider. Our mortgage provider collects money from us each month and holds on to it until property taxes or homeowners insurance is due. They then pay those bills and life seems easy since we don't have to worry about paying them. However, it is also an interest free loan to the bank during the months that nothing is paid by them. As such, I have decided to close our escrow account and instead allocate the monthly amount they were charging us to savings and then make the payments ourselves. Sure it gives us an extra couple of bills to pay and worry about, but I also will be able to earn a little interest while we save up to pay the bills. An easy bonus without much effort.

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