Escrow Accounts? What Are THOSE?
Updated: Mar 9, 2020
Before we get started, here's a quick reminder that I love you guys and am having the greatest time of my life serving you providing value in your lives!
Okay, let's dive in.
WTF is an Escrow Account?
This is one of the questions I get the most! I'll give you the basics and embed a video below that does an incredible job of providing a visual.
Think of an escrow account as a third party account that your lender sets up. This account holds your prepaid taxes and insurance so the lender can ensure that it's paid on time. Ultimately, this protects the house and investment the lender makes when they gave you money for it.
The biggest confusion usually comes when people are shocked at close, because they didn't know about escrow. It's money outside of your down payment and lender origination fee... but don't worry, it's like a short-term savings account and the money will be going towards your taxes and insurance.
Every month, tax and insurance money is pulled out of the escrow account and paid. Pretty simple, right?
VIDEO URL: https://www.youtube.com/watchv=ChB1wHF2ohM
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Until next time,