What Does it Mean to Escrow Property Taxes?
Escrowing your property taxes is a simple concept and useful tool for many property owners. When you escrow your property taxes, your lending company will assess you an extra amount over and above your mortgage payment each month. The amount and the fact that it is to be escrowed will be clearly delineated on your monthly mortgage statement. These payments are placed into an escrow account where they accrue and remain until it is time to pay your property tax bill.
Over time, you will have paid enough in small amounts to cover the taxes. When property tax bills are mailed out, your mortgage company will receive the actual bill and will pay it on your behalf. You will receive a notice of property taxes due from the taxing body. You’ll also be informed when your taxes have been paid.
Many mortgage lenders require their clients to escrow their property taxes, much the same as they require title insurance. When setting up your mortgage payment plan with your lender, you’ll learn whether or not you’re required to escrow your property taxes. If you are not required to do so, you may opt to anyway.
To Escrow or Not to Escrow?
Escrowing property taxes is popular for its simplicity and ease of use. Rather than remembering to save money for property taxes on your own, it is already written in to your mortgage payment. Paying a small portion of the taxes each month is often preferable for many people to coming up with thousands of dollars in property taxes when they are due. An added benefit is that your mortgage lender also takes care of physically paying the taxes. You do not have to worry about getting funds out of an account and then getting them to the appropriate taxing body.
On the other hand, there are property owners who do not escrow their tax payments. These individuals, firstly, are not required by their lender to do so or they may not have a mortgage. They also do not have trouble coming up with property tax payments when the bill arrives or they prefer to save the money on their own and earn interest in a private banking account.
Consider Your Money Habits
There is no right or wrong choice. It comes down to your personality, spending and payment habits. If you’re not a saver, are lax in your bill-paying or know you won’t have the lump sum available for your property taxes when they are due, then you are probably better off escrowing your taxes.
If you are a conscientious saver, don’t see a problem with having the lump sum available at tax time or prefer to handle tax payments on your own, then you may prefer not to escrow your property tax payments.
Your lender will be able to advise you about your options regarding property tax escrow. If you have a choice, be sure to carefully weigh the pros and cons and make sure it is the best decision for you.

If I’m refinancing my home, do I need title insurance?
Yes, when you refinance the lender considers it a new loan, even if you are using the same lender.  They require a new title search to look for any problems with the title, and will usually require you purchase a Lender’s Policy to protect their investment.  If you purchased an Owner’s Policy at the time of the original closing, it is in effect for as long as you or your heirs have an interest in the property.