Eh, it probably ain't the worst idea. IF you are a planner and disciplined, etc., etc. they are a bad idea. If not, maybe they are good for you.
BUT, in recent years I have heard more and more of mortgage companies not paying your homeowners insurance and property taxes on time. I think it has come to light a lot more in recent years as homeowners insurance is so hard to come by, and the increased outrage of being dropped when your mortgage company does not pay your bill for you.
But here is a new bad in this equation -a VERY bad incident with a family member. They paid off their house in the last year or so. (Very good, right????). Apparently, this family member had the impounds set up. Upon paying off the mortgage, and not receiving a bill when the homeowners insurance expired for the year, it lapsed.
Maybe they would have fiugred it out sooner rather than later, but right after the lapse a woman tripped in front of their house. She threatened to sue for injuries due to a large crack in the sidewalk. They called their insurance company to discuss their options, only to find out they did not have coverage. OMG!!!!!! IT is a blessing that they found out so soon, but the curse they found out too late.
The city denied responsibility for the sdewalk due to a new law in the last few years that homeowners were responsible to call and tell them if there were repairs to be made. Something like that.
Just a BAD confluence of factors, and unfortuantely my relative will be left holding the bag.
Anyway, hadn't heard much in a while and assumed it went away. Found out today they are officially being sued. *sigh* That just sucks!!
As it stands, insurance companie have agreed to pay anything above $100k and they are maybe okay with that. However, said relative has been bursting with glee that retirement is in less than 2 years for her. does this mean she will have to work longer???
Will this case be thrown out as frivolous??? Stuff like this just doesn't seem right...
Send good thoughts I guess.
In the meantime, if you do have impounds and you pay off your mortgage soon (or have paid it off recently), make sure you don't lapse your coverage. Because only you are looking out for you.
Warning - Impounds with your mortgage