Can I waive escrow and pay my property taxes and insurance myself?

Many conventional loans let you waive escrow if your down payment is large enough, often 20% or more, though the lender may charge a small fee, sometimes 0.125% to 0.25% of the loan, to do so. Waiving escrow means you are responsible for paying property tax and insurance bills yourself, on time, in lump sums. It suits disciplined savers who want to hold the money in a high-yield account and earn interest until the bills are due. The risk is missing a large payment, which can trigger penalties or force the lender to reinstate escrow. FHA, VA, and USDA loans generally require escrow. Weigh the modest interest you could earn against the discipline required.