What Is An Escrow Account? Do I Need One?
First, let’s distinguish between an escrow payment to your title company (this is the earnest money deposit or consideration, held by the title agent, to be applied to the buyer’s purchase) and an escrow account established or required by your lender.
As we show you in this video, an escrow account set up by your lender is an account in which you set aside a portion of your monthly mortgage payment to cover annual charges for homeowner’s insurance mortgage insurance (if applicable), and property taxes.
Escrow accounts are a good idea because they assure money will always be available for these payments.
If you use an escrow account to pay property tax or homeowner’s insurance make sure you are not penalized for late payments since it is the lender’s responsibility to make those payments.
At First Title & Abstract, Inc. we believe in helping our customers understand their transaction thoroughly.
When it comes to title companies in Naples and Marco Island, we are different than the rest — you can be sure we won’t rush you, or ask you to sign anything you don’t understand … because we believe in “Putting You FIRST!”