<prompt> Human: My wife and I in the the process of buying a new larger house. We are trying to keep the expenses as low as possible all around. I was talking to a friend and they said its better to not put escrow payments on your mortgage and instead to just put money aside every month in a separate bank account and then pay all at once at end of year. That way house payment is cheap and if a month comes up bad financially you have more wiggle room and have the option to forgo putting money back in escrow to use to help.Is there any way this is a bad idea? Sounds good to me.  <response>: Thats exactly what I do and exactly for these reasons.Ill add 2 things to this: some mortgage companies require escrow for lower rates. Get the escrow for the rate benefits but once you close, they cant touch the rate unless its no . if you have a mortgage with escrow, you can dump it by paying 18th of a point 125 for every 100k borrowed. It usually involved sending them the money and faxing a document stating youd like to remove escrow. Theyll send you a check back with your escrow balance and just watch the next few taxinsurance bills to make sure youre paying them. Definitely let the cityinsurance know about the change. 