To Escrow or Not to Escrow

We're nearing what should be the end of the home buying tunnel. The other day we figured out home owners insurance and I called our loan officer's assistant to give her the info. At this point I thought one of the terms of the loan was that we had to escrow property taxes and home owners insurance. That means a portion of our monthly mortgage payment would get put into a non interest bearing savings account to save for the annual property tax and home owners insurance bills.

During the call she let me know that we have the option on whether or not to escrow home owners insurance. If you've been reading this blog for a while you can probably see my issue with escrow. It's that non interest bearing thing. I think the idea is to help folks who don't have the discipline to save every month and/or ensure that the money is there when the bill is due. Though I haven't been the best saver in the last 2 months my Roth IRA has continued to grow. Even with today's low interest rates I'd rather have the money in an ING sub account gaining.