What is Escrow?

Escrow
When you're closing on your new home, an escrow agent is used to make sure the transaction will close without problems and in a certain amount of time. A house is said to be in escrow when in the closing process, money is secured by a third party on behalf of two parties when the transaction is taking place. An everyday way to understand the concept of what an escrow company does is to think of how you might use PayPal for Internet purchases.

The escrow agent is careful to assure that all terms and conditions of the seller's and buyer's contract are reached prior to the sale being finished. This includes receiving monies and paperwork, filling out required forms, and seeking out the release documents for any loans or liens that were paid off with the transaction, assuring you have a free title to your property before the asking price is fully paid.

	Whether it's your first home or your next home, I'll educate you through the process. E-mail me at mayleemba2007@yahoo.com to get some free information.

These are the legal forms that escrow companies usually look for: Title insurance policies Terms of sale and any seller-assisted financing Requests for payment for various services to be paid out of escrow funds Loan documents Tax statements Fire and other insurance policies

Closing on the property happens when all of the procedures of the escrow are complete. All expenses like title insurance, inspections and real estate commissions are paid. You'll then get the title to the property and the title insurance gets issued as agreed upon in the escrow instructions.

At the close of escrow, payments are submitted in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:		The Escrow Holder Won't:
Prepare escrow guidelines Perform a title research Comply with the bank's requirements as outlined in the escrow agreement Intake payments from the buyer Prorate insurance, tax, interest and other payments according to instructions Record deeds and other documents as instructed Obtain title insurance policy Close escrow when all instructions of seller and buyer are met Disburse funds and finish instructions		Give advice - the escrow company must stay at a fair, third-party status Dispense opinions about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is used to make payments for rolling expenses while there is a loan on the house. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.

Once you have the ABCs of the escrow process down, you can be a informed buyer.