Escrow waiver
Options to remove an escrow account from a loan vary based on factors such as state laws, investor guidelines, loan type, property type and Loan-to-Value (LTV) ratio.
If the loan qualifies, tax payments and homeowners' insurance premiums may be removed from escrow collection. However, there are certain types of payments that must be escrowed:
Private Mortgage Insurance (PMI) must be paid through your escrow account.
Customers who reside in a flood zone and are required to have flood insurance may not be able to waive an escrow account.
Waiver eligibility is dependent on several factors but generally, to qualify for an escrow waiver your loan must be a conventional loan (meaning Fannie Mae/Freddie Mac) and meet the following requirements:
Less than or equal to 80% Loan-to-value ratio
No delinquencies within the past 12 months, and depending on your investor, no 60-day delinquencies within the last 2 years
No loan modifications
No defaults on previous escrow waivers – this means if you previously had any escrow collection waived, you paid that item (tax or insurance) in a timely manner
No escrow disbursements scheduled in the upcoming 60 days
You cannot have a negative escrow balance
There may also be state-specific laws regarding when and how escrow waivers can be granted, so additional requirements may apply. Please contact us to confirm your loan's eligibility.
There is a one-time processing fee of 0.25% of the unpaid Principal Balance. If we confirm your loan meets all requirements, you will be mailed a letter specifying the calculated fee and how to make the payment by phone, electronically, or by mail.
It will take us five business days to evaluate your loan and confirm eligibility. You will then be mailed a decisioning letter. If you want to proceed, within 30 days of receiving the required fee, we will remove the escrow collection and mail you a letter confirming completion.
