What Is An Escrow Waiver? Requirements, Fees, Pros And Cons
Author:
Miranda CraceJan 31, 2025
•7-minute read
If you have a mortgage, you may have an escrow account. Lenders and servicers typically require borrowers to get an escrow account – particularly if they make a low down payment or have lower equity in their home.
But while an escrow account can make saving for your property taxes and homeowners insurance more convenient, it’s sometimes possible to get a loan without an escrow account or to waive an escrow account from your mortgage. To do this, you’ll need to qualify for an escrow waiver.
What Is An Escrow Waiver?
If you’re granted an escrow waiver, your property taxes and homeowners insurance won’t be included in your monthly mortgage payments. Instead, you’ll be responsible for paying each of your bills in one lump sum, typically at the end of the year. This is the alternative to using an escrow account, where your lender will set the amount you’ll pay for taxes and insurance aside and pay the bills on your behalf.
Waiving an escrow account can be useful or risky depending on your plans. You might prefer to hold onto the money yourself until it’s due so you can keep it in an interest-earning account. However, if you fail to save money ahead of time, you might be in for an unpleasant surprise when it comes time to pay.
If at any point you become delinquent on your taxes or insurance, your lender will most likely revoke the waiver and require you to pay into an escrow account.