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.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.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
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In your room, this word explains itself where it appears.
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