Be Informed About the Escrow Process

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Let's talk about "escrow". When you're closing on your new place, an escrow company is used to make sure the process will close properly and in a certain amount of time. Escrow holders hold money for "safe-keeping" in transactions between a buyer and seller. PayPal is a good example of an escrow company.

The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are performed prior to the sale being completed.

The documents the escrow agent may collect include:

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

You're ready to close when each step of the done in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. The property's title gets handed over to you and title insurance begins per the steps of your particular escrow agreement.

The escrow company receives a payment when the closing is complete. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

Assemble escrow instructions
Perform a title search
Meet lender's standards as specified in the escrow agreement
Accept payments from the buyer
Prorate tax, interest, insurance and other fees according to instructions
Record deeds and other paperwork as instructed
Request title insurance policy
Close escrow when all terms of agreement of seller and buyer have been finished
Disburse monies and finalize instructions

The Escrow Holder Won't:

Advise you - the escrow company stays at an impartial, third-party status
Dispense opinions about the outcome of your taxes

The Escrow Holder Will:		The Escrow Holder Won't:
Prepare escrow instructions Perform a title inquiry Comply with the bank's standards as noted in the escrow agreement Receive funds from the buyer Prorate interest, insurance, tax and other payments according to guidelines Record deeds and other paperwork as instructed Obtain title insurance policy Close escrow when all terms of agreement of seller and buyer have been finished Disburse funds and finalize instructions		Offer advice - the escrow company has to remain an impartial, third-party status Offer opinions about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is established to make payments for recurring fees 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.

This is a easy to understand guide about the escrow process. Your individual methods might be slightly different depending on your bank and your escrow company.