Having to pay property taxes with each mortgage payment irks a lot of borrowers. So why do some lenders insist on collecting them? Because unpaid property taxes are a special lien that ranks higher than a first mortgage. By collecting the taxes and paying them, the lender ensures the taxes are always up-to-date.

While paying the taxes and mortgage together may be convenient for borrowers, it's also more costly. Property tax accounts put a real crimp in a borrowers's cash flow, as they can wind up paying property taxes up to six months ahead of time. And little, if any, interest is earned on the money on deposit, too.

Not all lenders insist on a tax account. Many others will let you pay your own property taxes, if you've got good equity in your home and a decent credit rating. So ask about property taxes when shopping for a mortgage.