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Many lenders will set up an
optional escrow account for you
at closing. This is an account
used at a later date to pay for
items for which you are
responsible. When you make your
monthly payment, you pay
principal, interest, taxes,
homeowner insurance, and private
mortgage insurance, (PITI) if
applicable.
An escrow account provides you a
way to set aside monthly funds
that will be due later in the
year. Property taxes are due
annually toward year end. Escrow
accounts limit the lender's risk
that you would not have enough
funds when bills come due.
At closing, sellers will be
charged with taxes from the
first of the year until the day
of closing. These funds are
placed in your escrow account.
You will also prepay several
months of taxes. Then, on the
first of every month when you
make your payment, you will
deposit a month's worth of taxes
into your escrow account. Thus,
when the tax bill is due, the
sellers' tax contribution, your
prepaid tax plus your monthly
tax contribution will add up to
12 months worth of taxes. This
should be enough to pay the tax
bill.
Homeowner's insurance is also
deposited in the same escrow
account. At closing you pay the
yearly premium. The next premium
will be due on the one year
anniversary. Thus, when you make
your monthly payment, you are
contributing one month's worth
of property insurance. When the
premium is due in a year, there
will be enough funds in the
escrow account to pay the bill.
Mortgage insurance is handled in
a similar manner.
If you sell your home, you will
owe taxes and insurance through
the day you close. Excess funds
in the escrow account will be
refunded to you.
Contact
Me
I can help you with every
aspect of buying or selling your home because I’m
experienced, because I am a Better Homes and Gardens
Rand Realty Real Estate Professional . . .and because I
care.
As
your
Better
Homes
and
Gardens
Rand
Realty
Sales
Professional,
I
will
provide
you
with
the
information
you
need
to
make
an
educated
decision.
The relationship between a home buyer or seller and their agent is based on trust, shared goals and understanding. I strive to continually improve and to do this I listen and take the needs and wants into consideration.
For assistance with any of your real estate needs, please contact me, whether it's to get started on helping you realize your goals and dreams, or just to ask a question - no pressure, no hassle, no obligation - just a friendly conversation. I would welcome the opportunity to make a difference for you. |
