Escrow hurting cash flow

[Chad Althaus]

Hi BP community, I was curious on others’ experience with the topic of escrow. Earlier this year, my monthly escrow payment on a $100k house increased $180 (27% increase), which cuts my cash flow a great deal. When I talked with the escrow specialist at the mortgage company, she told me part of that is because the taxes increased and the rest is a buffer predicting the next property tax hike. I know they have a certain amount extra that they can hold, and while they say it is “my money”, I know in reality it is sitting in their bank account and providing them capital to invest with. I have been considering taking my property taxes out of escrow and paying them myself in order to return some cash flow to my pocket. Is this a common thing to do, or is there a way I can decrease my payment in my current situation? Any help is greatly appreciated. Thanks, Chad

[Wayne Brooks]

Except for any “buffer” which is not typical....your escrow payments don’t “hurt” your cash flow, they “reveal” your real cash flow.