When there is a waiver of escrows, it basically means that a lender has agreed to allow a borrower to pay for insurance and taxes directly without needing to open an escrow account with them.
When an escrow account is a requirement deemed necessary by a lender, it is not often that they would allow a waiver of escrows.
This is because the very purpose of such accounts are meant minimize the risks of borrower not paying for those expenses which could jeopardize the lender’s position on the loan.
The money that is already in the account will be used to pay for the expenses.
So a lender must be really desperate for immediate revenue if they authorize a waiver.
Borrower who request for waivers are usually due to the reason of cash flow as they don’t have enough cash on hand to deposit into an escrow account.
If you face such a situation, you must ask yourself whether you can actually afford the house in the first place?