DEAR BOB: We are closing in a few weeks on the purchase of our retirement home. As you often suggest, although we are both 80, we are arranging a mortgage so we don't tie up all our cash in our home. We are getting the mortgage through the builder's lender because of a $2,500 incentive toward our closing costs. But we must pay one-eighth percent extra mortgage interest because we do not want an escrow account for the property taxes and insurance. When we questioned this extra cost, the lender said it is legal and everyone does it. Is that true? – John L. DEAR JOHN: Congratulations on buying a home at age 80. Many mortgage lenders do not require escrow accounts for payment of your property taxes and insurance. Purchase Bob Bruss reports online. However, some borrowers enjoy giving their lenders "free money" each month as they pay one-twelfth of their estimated property taxes and insurance into an escrow account along with their mortgage principal and interest. In the last yea...
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