Difficulty: Moderately Challenging
Step1
Tell your lender before you close on your home if you do not want an escrow account set up. This means that you would be directly responsible for making sure that your property taxes and homeowner's insurance are paid and will have to keep your lender informed on those payments by sending copies of paid receipts.
Step2
Ask your lender to allow you to dissolve your escrow account. This request is often not allowed after a loan has been established. Most lenders will require that a home buyer has an escrow account if the loan represents more than 80 percent of the appraised value of the home. So, if you are thinking of dissolving your escrow account, make sure that you have enough equity built into your situation that would show the lender that you are responsible enough to pay the property taxes directly.
Step3
Refinance your home to set up a new loan without an escrow account. If you can get a considerably better interest rate and can refinance your home with low closing costs, then it would be a financially sound idea to go forward with a refinance. Make sure that you make it clear to the new lender that you do not want an escrow account.
Step4
Pay off your mortgage loan. If you are able to pay off your mortgage loan early, then you will no longer have an escrow account. You will be responsible for payment of your property taxes and homeowner's insurance. Make sure that all the taxing authorities and your homeowner's insurance agent all know that all future statements and assessments should be sent directly to you the homeowner.
