When you apply for a first mortgage refinance or purchase with Affinity Plus, you will be offered the option to escrow. When you escrow, Affinity Plus is responsible for paying your property taxes on your behalf twice a year if you live in Minnesota and annually if you like in Wisconsin or North Dakota. We will also pay your homeowner’s insurance premium annually on your behalf through your escrow account.
Escrowing your property tax and insurance premiums offer the following benefits:
- Simplified Budgeting - your taxes and insurance payments are spread out over the year and collected as part of your mortgage payment.
- Guaranteed Payment - Affinity Plus makes your payments for your taxes and insurance out of your escrow account, no late payments and no additional fees.
- Convenience - you never have to remember to send a check or pay these bills- it’s done for you.
Is there a difference between escrow versus paying out of pocket?
You may prefer not to escrow. The funds we collect from you for your escrow account earn interest comparable to our Membership Savings Account (S1); however, you may decide you would prefer to save this money in a separate account or other financial investment that potentially earns a higher rate of return. Your property taxes and insurance would then be paid out of pocket. You can choose to add an escrow account or discontinue an escrow account for your first mortgage with Affinity Plus at any time.
Choosing not to escrow will mean your monthly mortgage payment may be smaller, however we recommend that you set aside the funds to pay your property tax and insurance premiums, as these payments are often significant and may not be easy to make if you have not budgeted for the expense.
Every year, Affinity Plus performs an escrow analysis to assess the funds available in your escrow account against your current property tax assessments and insurance premiums. Your monthly mortgage payment may be affected by the result of this analysis, as property taxes and insurance premiums can change. You will be notified of the results of this analysis every July.