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A Curious User
2 years ago
In doing my research comparing a VA loan versus a conventional loan, it appears that if you put 20% down on a conventional loan there is no escrow account required. I would be able to pay my own taxes and insurance directly each year. What is allowable under the VA home loan program?
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Best Expert Answer
Eric Campbell
2 years ago
VA does not require escrows but as far as I'm aware every lender/investor does on VA loans. Also, on conventional loans you can typically waive escrows regardless of your equity position. HOWEVER, depending on several factors, waiving escrows can increase your lender costs at a given rate. Keep in mind legislation has been passed in recent years to highly regulate escrow accounts so the servicers aren't putting away more than necessary (in past they put away more to make interest).
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Bruce Reichstein
2 years ago
When a VA borrower applies for a loan and closes the deal they're responsible for more than just making their monthly mortgage payments. There are property taxes to pay, hazard insurance premiums and other items that may require payments. That's one reason that almost all VA approved lenders require an escrow account for each applicant. It gives the lender the ability to pay the required taxes and insurance without waiting for the borrower to send in payments.

Escrow accounts are not required by the VA, but the lender usually requires them as conditions of the loan. VA loans are lold into the Ginnie Mae pools and all GNMA pools require escrow accounts.
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Sabra Richins
a year ago
A VA insured loan is only needed when you are putting less than 20% down on a home. If your down payment is 20% or higher, you do not need a VA loan. An escrow account is normally required if you are borrowing more than 80% of the value, which is the case with VA insured loans.
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