Does it make any difference if pay my real estate taxes and my home insurance with my mortgage payment?

I would like to know how much difference it makes in interest rate (if any), if I pay real estate and my home insurance.

Public Comments

1. No. The interest rate is based on your principal balance.
2. The bank provides that service to you free, essentially. The real question is--how good are you at saving a lot of money and then paying it out when taxes and insurance comes due? Be honest with yourself. If you are even part spendthrift you will fail to save enough cash to pay your huge tax bill. Panic will ensue, you'll have late fees AND you might get liened if you don't make those payments. I suggest you pay through your mortgage payment.
3. Actually it may make a difference. If you are getting a new loan, the lender typically will charge you a 1/4 point (or .25%) of the loan amount to not have an escrow set up to pay your taxes & insurance with your mortgage payment. If you dont pay the .25 point, then the lender typically raised the interest rate charged to cover that .25% cost. That usually means about an eighth (1/8th or .125%) of a percent higher in the interest rate.
4. it won;t change the interest rate at all - it will just add 1/12 of the taxes and insurance to your monthly payment - you would have to get an escrow acct set up with the mortgage company and forward all insurance and tax bill so them so they pay those bills out of the escrow from your additional monthly payments
5. It does not matter if you pay the insurance or taxes on your own. People that have good money management skills do pay on these on their own. Poor money managers prefer an escrow account where the lender add these payments to the monthly mortgage payments. If the loan amount exceed 80% of the value of the property most lenders will require these two to be included in the monthly payments. It makes no difference in your interest rate or principal balance. There are normally 4 components to a mortgage payment 1. Interest 2. Principal 3. Taxes (My pay on your own with less than 80% loan) 4. Insurance (May pay on your own with less than 80% loan) I hope this has been of some use to you, good luck. "FIGHT ON"
6. Ian C is the only correct person. The bank can charge more interest rate if you pay your taxes and insurance yourself. They want to make sure that it's paid and the best way to make sure is to pay it for you. Especially in this market.
7. Here's my take, I have seen a bank charge more for not paying taxes and insurance, so that is something that you want to know upfront. I've also worked on the title clearance end of things and you would be amazed about the amount of people that do not know what they pay in taxes and insurance yearly since they are escrowed, never mind who their insurance company is. To me, if your paying money, you should know where it's going, but you must be diligent, as I have seen people blow off paying their property taxes, go to refinance, and have to take out an extra 10k to pay off their tax liens. Bottom line, make sure you won't be charged for not escrowing and make sure you can pay your taxes and insurance before you make a decision