FAQs

Can I waive my escrow and pay my own property taxes and insurance?

Whether you can waive your escrow account depends on your specific loan type and how much equity you have in your home.

Eligibility by Loan Type

  • FHA Loans: FHA guidelines require an escrow account for the life of the loan. These accounts cannot be waived.
  • VA Loans: While the VA doesn’t strictly mandate escrow, most lenders require them to protect the property.
  • Conventional Loans: You can typically request to waive your escrow if you meet the following criteria:
    • Your loan balance is 80% or less of the original property value (20% equity).
    • Your loan has been active for at least 12 months.
    • Your payments are current with no recent late entries.

Responsibilities of Waiving Escrow

If you choose to pay your taxes and insurance directly, please keep the following in mind:

  • Budgeting: You are responsible for saving for these large, annual expenses.
  • Late Fees: Failure to pay property taxes can result in significant county penalties or even tax foreclosure.
  • Insurance Coverage: If your insurance policy lapses, Pennymac may be required to purchase “force-placed” insurance at your expense to protect the property.

How to Request a Waiver:

If you meet the requirements for a conventional loan, please send a request through the Message Center from your Pennymac account. Our team will review your account and let you know if a waiver is available.