💡 The Hidden Wealth Strategy Most Homeowners Don’t Know About

How one of our clients took control of their cash flow by removing escrow from their mortgage

Here’s a little-known tip most homeowners don’t realize: you don’t have to keep your property taxes and insurance tied up in escrow with your lender.

Most people assume escrow is just “how it’s done.” You make one monthly payment that covers your mortgage, taxes, and insurance, and that’s that. But there’s another option that can improve your cash flow and help your money work harder for you.

🏠 A Real Story: How We Helped a Client Rethink Their Mortgage

A few months ago, one of our past clients, Sarah, called me feeling frustrated. She and her husband had refinanced a few years back and were noticing that their monthly payment felt higher than expected, even though interest rates hadn’t changed much.

When we looked closer, part of the reason was their escrow account. They were pre-paying property taxes and homeowners insurance every month, which meant giving their lender thousands of dollars to hold onto throughout the year.

We started talking about how removing escrow could free up their monthly cash flow. And here’s the part most people don’t realize: when your lender holds those funds, you’re essentially giving them an interest-free loan.

Instead of your money sitting in their account all year, you can keep that cash in your own high-yield savings account or use it strategically for short-term investments or larger expenses when it benefits you most.

💰 What Happened When They Made the Switch

Sarah and her husband decided to request escrow removal through their lender since they had more than 20% equity and a strong payment history. It cost them a one-time $300 fee, but the payoff started right away.

Their monthly mortgage payment dropped by about $450 because those property tax and insurance portions were no longer included.

They opened a separate high-yield savings account and set up an automatic transfer of that $450 each month, the same amount they would’ve paid into escrow.

By the time their annual property taxes and insurance came due, not only did they have the full amount saved, but they had also earned nearly $150 in interest. That’s money that used to go to their lender’s pocket, not theirs.

Sarah later told me, “It’s the first time we actually felt in control of our mortgage payments instead of just sending money off into a black hole.”

🌿 Why This Matters for Homeowners

Having control over your money and understanding where it’s working for you is one of the simplest ways to build long-term wealth.

When you manage your property taxes and insurance yourself, you:

• Keep your cash flow flexible

• Can time payments around bonuses, commissions, or refunds

• Earn interest on money that used to sit idle

• Can easily switch insurance providers without escrow headaches

• Avoid frustrating escrow shortages when taxes or premiums rise unexpectedly

It’s about taking back control of your financial picture and making your home work for you.

⚖️ Is Removing Escrow Right for You?

This isn’t a one-size-fits-all move. Removing escrow makes the most sense for homeowners who are disciplined savers and comfortable managing larger payments when taxes and insurance come due.

Lenders usually require 20% equity in your home, a strong payment history, and a one-time processing fee, typically between $250 and $500.

If you meet those requirements and you’re confident in your budgeting habits, it’s worth exploring. Just remember that without escrow, the responsibility of saving for those large payments is fully on you, so automate it to make it simple.

✨ The Bigger Picture

For Sarah, this wasn’t just about saving $150 in interest. It was about the mindset shift that came with it.

She told me, “It made me realize how much money we hand over every month without thinking. Now I’m looking at other areas where we can optimize our cash flow.”

That’s the real power of homeownership. Not just owning a property, but owning your financial decisions.

If you’d like to learn whether removing escrow could make sense for you, I’d be happy to walk you through it or connect you with a lender who can help you explore the numbers.

Sometimes the smartest wealth moves aren’t flashy. They’re the quiet, intentional choices that put you back in control.

Best,

Meghan

The Scrimgeour Group – eXp Realty