YOU ASK:

Can I have my insurance and taxes taken out from my FHA mortgage payment?

WE ANSWER:

You can opt to pay for your homeowners insurance and taxes separately from your FHA mortgage payment. You can also decide to include these two when you submit your mortgage payment.

Another option (which some lenders require) would be to establish an escrow account, which would be the one to service you month insurance and tax payments. This way, the lender is assured that you are also paying for your homeowners insurance and taxes even as you pay your mortgage.

This is because even if you are up to date with your mortgage payment, you may still be in danger of having a lien placed on your property if you don't pay your real estate taxes. Also, your home may be damaged or totally destroyed because of a storm, a tornado or any other occurrence that may be covered through a homeowners insurance policy.

The important thing is that you are up-to-date for all three payments - your mortgage, your homeowners insurance and your taxes. If you want to manage your insurance premiums and tax payments by yourself, please feel free to do so. But, really, it is more complicated.

People opt to pay all these with just one payment - the FHA mortgage payment. This provides them with convenience, as they only have to think of one payment per month. An escrow account will also do the trick. The lender will also tend to raise your interest if you don't have an escrow account or if you don't pay these two along with your FHA mortgage payment.

Another thing is that if you already have established an escrow account, it will be more difficult to stop this service. If you really want to take out your insurance and tax payments because you want to manage these yourself, the option that is left would be to have the mortgage refinanced.

In addition, if, by "taken out" you mean to not pay the mortgage insurance, you will not be allowed to do so until you have meet the requirements - that your balance should reach the 80% loan-to-value threshold.

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