Mortgage fraud and identity theft risks
Frequently Asked Questions
Straight answers to the questions we hear most.
In some cases, yes. You may be able to remove an escrow account if you have a conventional loan and have built up significant equity (often 20% or more), have a strong payment history, and make a formal request with your lender. However, for government-backed loans like FHA and USDA, an escrow account is typically required for the life of the loan. You should always check with your specific lender about their policies.
Eligibility varies by lender and loan type. Conventional loans (those backed by Fannie Mae or Freddie Mac) are commonly eligible. Loans that are often ineligible include FHA loans, VA loans, USDA loans, and some jumbo or portfolio loans. The first step is always to contact your mortgage servicer to confirm your loan’s eligibility.
A recast and a refinance are fundamentally different. A recast keeps your existing loan intact—same lender, interest rate, and loan term—and only lowers your monthly payment by re-amortizing the principal. A refinance replaces your old loan with an entirely new one, which can change your interest rate, term, and monthly payment, but it involves credit checks, closing costs, and fees, unlike a simple recast.
If your rate lock expires before your loan closes, you will typically lose the locked rate. You will then be subject to the current market rates at the time of closing, which could be higher. In some cases, you may be able to pay a fee to extend the lock, but this is not guaranteed.
Most lenders prefer a debt-to-income ratio of 43% or lower, though some government-backed loans may allow for a higher DTI. Your DTI is calculated by dividing your total monthly debt payments (including your new mortgage) by your gross monthly income. A lower DTI demonstrates a stronger ability to manage monthly payments.
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