In a move that the company is calling a first of its kind, United Wholesale Mortgage announced Tuesday that it is eliminating the 0.25% escrow waiver fee nationwide for all conforming conventional loans.
The company says that the move will give mortgage brokers a “competitive edge” over large banks and large retail lenders that tend to charge 0.25% of the loan amount to allow a consumer to manage their yearly tax and insurance payments.
As a result of this fee elimination, borrowers can potentially save thousands of dollars at closing on fees and an initial escrow deposit, the company said.
The company said that it will allow borrowers to waive escrow on all conventional loans up to 90% loan-to-value ratio. For LTVs exceeding 80%, borrowers will be required to show a FICO score of 720 or above.
“This change is a major win for our mortgage brokers and their borrowers,” said Mat Ishbia, president and CEO of UWM. “Removing the 0.25% adjustment will allow borrowers to keep more money in their pockets and the flexibility to pay their own taxes and insurance yearly.”