Is it better for our rate to impound Tax & INsurance? My broker says yes, I don't trust him.

In California, where you are, very few lenders actually charge to waive impounds. If you are working with a broker, they should be able to place your loan somewhere that will give you the same pricing with or without escrow impounds. If your loan to value is below 90%, you are not required to have escrow impounds so make sure you know your options and are working with someone who can properly explain them to you. Only work with a licensed California Mortgage loan officer. Gregorio Denny --WeFixRates.Com--

I will add that having impounds is convenient and there is no shock factor three times a year when you have to come up with taxes and insurance money to pay these bills. Most people choose to have impounds and not have to worry about paying these bills. The interest on these monies is nominal at best.

And I will add ... No, it's not better to impound, especially when not charged for the waiver. Leaving your money in a non-interest bearing account serves no purpose but to enrich and protect your mortgage servicer. Any responsible homeowner can surely self-budget the same amount in their own account and pay their taxes and insurance themselves. Make sure your broker is not trying to pocket an additional .25% for compensation.

Emily,Whether or not you impound your taxes is as equally important as trusting your broker. If you do not trust him, do not do business with him.Call or email me and I would be happy to review your individual situation for impounds.Best,Matt DavisMatt@pierwestcapital.com888-PierWest(743-7937) X 701

I understand that you don't have to pay more for the escrow account waiver on a Conventional Loan in California; but, it could be a lender overlay. Once again, I'll reiterate, if you don't trust your broker, you shouldn't be working with him; there are plenty of trustworthy loan officers out there who will be happy to help you. I'm of the school that escrow accounts are a good thing if you don't have the self-discipline to pay yourself that "escrow" money every month and make sure it's available when it comes due; I've found that most people who feel like they can set aside this money themselves, still don't. So, just know yourself well before you make this decision.

Emily, If you have at least 10.1% equity and are capable of paying your taxes twice a year when due, and your property hazard insurance, the answer is no.Like GVD said, most lenders do not charge for an Escrow Waiver in CA when your LTV is 89.9% or less. If they do, it ranges from a 0.25% down to 0.100% cost. Multiply your loan amount by those percentages to determine worse case scenario. ..... Like everyone else has mentioned, WHY would you do any business with someone you don't trust? That's certainly not a warm and fuzzy feeling. And to me, not a smart decision. ..... Happy funding, Rudi