To have someone else write a few checks for you?
I’m talking about escrow accounts, which are accounts that mortgage companies use to hold the money they’ve collected to pay property taxes and insurance on your behalf. They are also allowed to keep a cushion of 2 months’ worth in the account. This means that if your taxes and insurance would total $100 per month if you paid them yourself, your mortgage company could collect $116.67 per month from you. This would leave a cushion of $200 remaining in escrow. They would then pay the hypothetical $1200 per year in taxes. They would also pay insurance on your behalf, and let the $200 remain in the account.
Some mortgage companies require that you use an escrow account. Some charge a fee to opt-out, and others leave it up to you. The fact that some companies require you to participate, and others charge a fee not to should be a sign there’s money to be made with escrow money.
If you’re able to save the amount earmarked for taxes and insurance yourself, you can earn interest on it. I’m happy to say that our mortgage company is one of the ones that allow you to just opt-out. (Or at least that’s the impression I gathered from my phone call this morning. I’ll know for sure in about 13 business days.) In our case, this change should lead to approximately $80 earnings in interest per year. For eighty bucks I can remember to write a few checks each year. Especially instead of having the mortgage company do it for me. Of course, the greater your potential property taxes & insurance, the more money you could earn in interest by taking care of things yourself. And over time, that interest will grow.