the escrow company i'm going with wants $50 in order to give my 3% onmy account. since i'm going to be paying taxes of about $1700 a year,is it really worth it?? can they actually charge me that much in the first place. also, since its an investment expense, can i deduct next yr on my tax return???
In Massachusetts, that $50 is the fee they are allowed to charge you to set up an escrow account that pays interest. If they compelled you to pay into an escrow account that did not pay interest, no fee.Given that your average balance will probably be $600 or so, they are golden by paying you a pittance in interest (frankly I am surprised they will offer 3% when savings accounts are paying 1.2%) and getting the fee up front.It is not an investment expense. But it is a closing cost and adds to your cost basis if tax on sale becomes an issue.Everyone agrees that if you can get out of paying into bank escrow accounts, you should. But, that may be a condition of getting the loan so maybe you can't.
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