Definition Of Waiver Of Escrows In Mortgage

Definition of "Waiver of Escrows"

Sue Menard, Real Estate Agent Keller Williams Colonial Partners

Authorization by the lender for the borrower to pay taxes and insurance directly. This is in contrast to the standard procedure, where the lender adds a charge to the monthly mortgage payment that is deposited in an escrow account, from which the lender pays the borrower's taxes and insurance when they come due. On some loans lenders will not waive escrows, and on loans where the waiver is permitted lenders are likely either to charge for it in the form of a small increase in points or to restrict it to borrowers making a large down payment.