Your existing escrow account will be refunded to you by your current lender within 30 days by Federal Law. They are not obligated to credit this money back when you close on your new refinance loan and very few will do it. This is because they still can collect interest on the money for that additional 30 day period.

If you decide to escrow for taxes and insurance in your new loan, you will be required to fund this account and wait for the money in your existing account to be refunded 30 days later. Depending on the timing, this can be a sizable amount of money. If you wish, this money can also be “rolled into” the new loan amount provided that you have enough equity.

When you refinance and pay closing costs, you can certainly roll in these expenses to the new loan if you so desire as long as you have enough equity to avoid paying PMI.