Escrow waiver
An option some lenders offer to skip the escrow account and pay your own taxes and insurance directly. Usually needs a bigger down payment and may cost a small rate bump.
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Part 1 of 4
Why a seller cares
A buyer who waives escrows pays their own taxes and insurance, and their lender usually asks for a larger down payment to allow it. It has no effect on your sale beyond what it says about the buyer's cash.
Part 2 of 4
A simple example
The buyer's lender allows an escrow waiver on a loan with 20% down. The buyer pays the county and the insurer directly after closing.
| The buyer's choice | What it means |
|---|---|
| Waives escrow | Usually 20% or more down, and they manage their own tax bills |
| Keeps escrow | The lender collects monthly and pays the bills |
| Either | Nothing changes at your closing |
An escrow waiver is a detail of the buyer's loan, and a small sign of how much cash they have.
Part 3 of 4
What people get wrong
That an escrow waiver has something to do with the closing escrow. Same word, different account: this is the lender's tax-and-insurance one.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines escrow waiver in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
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