What Do You Need To Know About Escrow?
If you are familiar with real estate, you probably heard the term ESCROW. But what really is that?
What Is Escrow?
In real estate term, Escrow is a financial arrangement where payment of the funds are regulated and held by a third party for a certain time. The funds are secured until the Escrow office worked out the details and finally come up with the closing.
2 Types of Escrow
1. An escrow account used before or during the time of closing
The escrow officer (commonly an attorney or title company representative) keeps all the important documents and funds while both buyer and seller are still on the process of closing. The escrow officer is in charge of the smooth closing and makes sure everything will be paid off.
2. An ongoing escrow account
Buyers have some obligations such as property taxes and home insurance premiums. So after the purchase, the mortgage lender sets up an escrow account on the buyer’s behalf. Then, the monthly installment will be deposited into the escrow account.
Whether it is digital goods, vehicles, jewelry or artwork, Escrow.com ensures that all buyers and sellers are protected in the same manner and their concerns are all attended to. The reason why many lenders require buyers to pay through an escrow account. Sometimes, it is also mandated by law. Another good thing about using the escrow account is that it makes it easier for its clients to budget for some other large property-related bills by paying in small amounts with every mortgage payment.
Escrow makes the purchase more convenient for buyers and sellers.