After the specified escrow period, cancellation is allowed if the loan-to-value is under what percent?

After the specified escrow period, cancellation is allowed if the loan-to-value is under what percent?

• A. 70%
• B. 80%
• C. 90%
• D. 95%

Answer: (B)

Escrow cancellation rights hinge on a specific threshold for loan risk. An escrow account is the pool of funds a lender collects to pay taxes and insurance on your home each year. After you’ve shown a reliable payment history for the required period, you can request cancellation of that escrow if your loan-to-value ratio has fallen to 80% or less. When LTV reaches 80% or lower, the lender’s risk is reduced enough that they may stop requiring you to fund taxes and insurance through an escrow account, provided you’re current on payments. If the LTV is above 80%, the lender can generally keep the escrow in place.

Escrow cancellation rights hinge on a specific threshold for loan risk. An escrow account is the pool of funds a lender collects to pay taxes and insurance on your home each year. After you’ve shown a reliable payment history for the required period, you can request cancellation of that escrow if your loan-to-value ratio has fallen to 80% or less. When LTV reaches 80% or lower, the lender’s risk is reduced enough that they may stop requiring you to fund taxes and insurance through an escrow account, provided you’re current on payments. If the LTV is above 80%, the lender can generally keep the escrow in place.