Great video and channel. We waved escrow as well. You can tell it doesn't happen a lot, they kept asking "are you sure you want to do this" haha. We bought our house about 8 years ago and worked our tails off to pay it off. I am now a legit "Debt Free Millennial!"
I save for my property taxes in two 6 month CDs, the rate is 5.1%. I set up auto transfer every paycheck. I’m in Texas so it’s a lot of money and lots of interest. Sometimes I’ll open a new credit card to pay my taxes then I also get travel rewards! It’s a win win!!
We knew you didn’t need to use escrow for taxes but didn’t understand that our insurance was also in escrow. I’m so annoyed because I didn’t want to have escrow. But taxes are way more expensive so at least we have that in our high yield savings account. We also use Ally for all our banking and I love them. The buckets are great, only downside is cash. There’s no way to deposit cash so I might open an account with another bank just so we can deposit cash into it when we do get it.
We had one realtor and she referred us to a few different local brokers to compare interest rates. So the broker is the representative from the lending company and they will tell you what you qualify for and the interest rate. You keep your one realtor but usually they have referrals of brokers they like to work with or who they think are more qualified or are getting better rates. You can always look around yourself. We bank with a local credit union and checked their rates and the 3 people our realtor referred before deciding who to go with.
We did the same thing as @ScrunchyPersonalFinance - one realtor but multiple mortgage lender options. We checked out her referral and then did our own research. Ultimately, we went with our own bank and did not use her referral.
Has it changed recently that the buyer pays the real estate agent? I thought it was always the seller. When I bought my house two years ago the seller paid everything.
When you pay these fees to the bank in the process of potentially waving the escrow, is that in relation to having a mortgage or are you talking about being a cash buyer? Do these things also apply to a cash buyer?
No they don’t apply to a cash buyer. I bought my home in cash. I had and have no escrow. I just put aside money monthly (on my own) to be able to pay my property taxes and property insurance when they come due. So my money does earn interest.
Also - I had no mortgage origination fees or any other fees. I simply paid the listed price if the house minus a discount (because it needed a new roof) that I negotiated with the seller.
Lawyer here and I’d say no for 6% but absolutely yes you do need one. I think 4% is the highest I’d pay. The legal disclosures and paperwork alone is difficult to understand and if you don’t have a realtor you have to fill out that paperwork yourself and I’ve seen sellers leave critical info off disclosures that lead to lawsuits and also buyers who didn’t read it thoroughly or didn’t understand the disclosures and are later mad that they didn’t understand the home had a defect. If you’ve purchased a home or two before and have time to do this all yourself you can and most of the time it will be ok. But the times it’s not ok, it’s really bad. If we ever upgrade we’ll likely represent ourselves if we have time, but having a realtor do all the scheduling, picking up keys for showing and middle man work was worth it to me personally.
@@ScrunchyPersonalFinance thanks for the response. I've bought 2 houses before and was just curious. I have used realtors in the past and their job never seemed that difficult.
The waiving escrow really only is worth it in high tax states and on higher value properties. Ie. Let's use the example of a 10k escrow payment on a home. Now that money could go in a savings account for say 5 percent which will net 500 dollars in a year which isn't nothing but it is not extraordinary. That said, if people want to invest the time and energy for this I won't complain or dissuade. Our home is pretty simple and our escrow never exceeds 3 to 4 grand a year at one time so it was not worth it to us. Great video and tips. 😊
Great video and channel. We waved escrow as well. You can tell it doesn't happen a lot, they kept asking "are you sure you want to do this" haha. We bought our house about 8 years ago and worked our tails off to pay it off. I am now a legit "Debt Free Millennial!"
YES! Congratulations on paying off your home early. #goals!
I think that is a great idea to waive escrow and float your money in a HYSA. I think I'll use this strategy
I save for my property taxes in two 6 month CDs, the rate is 5.1%. I set up auto transfer every paycheck. I’m in Texas so it’s a lot of money and lots of interest. Sometimes I’ll open a new credit card to pay my taxes then I also get travel rewards! It’s a win win!!
thanks for all the details... love the video.
Thanks for watching!
Hello, is there a financial book that you would recommend that would cover all basics? Thank you
We knew you didn’t need to use escrow for taxes but didn’t understand that our insurance was also in escrow. I’m so annoyed because I didn’t want to have escrow. But taxes are way more expensive so at least we have that in our high yield savings account. We also use Ally for all our banking and I love them. The buckets are great, only downside is cash. There’s no way to deposit cash so I might open an account with another bank just so we can deposit cash into it when we do get it.
So if we shoo around for interest rates do we go with different realtors to do that? Sorry new to this whole process.
We had one realtor and she referred us to a few different local brokers to compare interest rates. So the broker is the representative from the lending company and they will tell you what you qualify for and the interest rate. You keep your one realtor but usually they have referrals of brokers they like to work with or who they think are more qualified or are getting better rates. You can always look around yourself. We bank with a local credit union and checked their rates and the 3 people our realtor referred before deciding who to go with.
We did the same thing as @ScrunchyPersonalFinance - one realtor but multiple mortgage lender options. We checked out her referral and then did our own research. Ultimately, we went with our own bank and did not use her referral.
Congratulations on your first home 🎉
Thank you!! 😊
Has it changed recently that the buyer pays the real estate agent? I thought it was always the seller. When I bought my house two years ago the seller paid everything.
When you pay these fees to the bank in the process of potentially waving the escrow, is that in relation to having a mortgage or are you talking about being a cash buyer? Do these things also apply to a cash buyer?
No they don’t apply to a cash buyer. I bought my home in cash. I had and have no escrow. I just put aside money monthly (on my own) to be able to pay my property taxes and property insurance when they come due. So my money does earn interest.
Also - I had no mortgage origination fees or any other fees. I simply paid the listed price if the house minus a discount (because it needed a new roof) that I negotiated with the seller.
This might be controversial but do you think a realtor is worth paying 6% of the home cost?
Lawyer here and I’d say no for 6% but absolutely yes you do need one. I think 4% is the highest I’d pay. The legal disclosures and paperwork alone is difficult to understand and if you don’t have a realtor you have to fill out that paperwork yourself and I’ve seen sellers leave critical info off disclosures that lead to lawsuits and also buyers who didn’t read it thoroughly or didn’t understand the disclosures and are later mad that they didn’t understand the home had a defect.
If you’ve purchased a home or two before and have time to do this all yourself you can and most of the time it will be ok. But the times it’s not ok, it’s really bad. If we ever upgrade we’ll likely represent ourselves if we have time, but having a realtor do all the scheduling, picking up keys for showing and middle man work was worth it to me personally.
@@ScrunchyPersonalFinance thanks for the response. I've bought 2 houses before and was just curious. I have used realtors in the past and their job never seemed that difficult.
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Do you regret spending so much on a home?
The waiving escrow really only is worth it in high tax states and on higher value properties. Ie. Let's use the example of a 10k escrow payment on a home. Now that money could go in a savings account for say 5 percent which will net 500 dollars in a year which isn't nothing but it is not extraordinary. That said, if people want to invest the time and energy for this I won't complain or dissuade. Our home is pretty simple and our escrow never exceeds 3 to 4 grand a year at one time so it was not worth it to us. Great video and tips. 😊
This is my first time doing this so in a year, I'll report back! My thinking was if I can earn $500 in savings account interest, why not?