How to Cancel an Escrow Account Without Refinancing the Mortgage

Mortgage lenders utilize escrow accounts to ensure that their borrowers' property taxes and homeowner's insurance premiums are being paid on time. In some cases, maintaining an escrow account is actually a requirement of the lender. Typically this applies to special loan programs -- such as FHA -- or if the borrower has a low down payment. If you currently have an escrow account, it might be possible to cancel without refinancing the mortgage. However, the final decision is up to the lender.

Step 1

Review the loan documents pertaining to the escrow. Look for information regarding the escrow requirements or cancellation. If you can't find the information or it's unclear to you, contact your lender directly for more details.

Step 2

Write a formal letter to the lender to request a cancellation of your escrow account. Send any applicable cancellation fees with the letter.

Step 3

Wait for the lender's response. Once your escrow is cancelled, you will need to budget accordingly to pay for taxes and insurance when they are due.