What is an ESCROw account?

Question

What is Escrow, escrow officer, who will that money in the Escrow account go to? Just want to know...

Answer 1

There are several different kinds of escrow accounts.

When you get a mortgage, the mortgage company can collect a monthly amount that is used to pay your homeowner's insurance and property taxes. This is pretty handy and most people have their property taxes and insurance escrowed. This is not required. You can make the insurance and property tax payments out of your own funds.

However, in some states, the closing process is called "escrow". This is where the money for the home is deposited with a third neutral party who carries out the provisions of the purchase agreement. An escrow officer is the person who handles this. An escrow company handles the paperwork and the escrow officer works with the escrow company.

Answer 2

ESCROW: The deposit of instruments and funds with a third neutral
party with instructions to carry out the provisions of an agreement
or contract.
Escrow officer is a person, who is actually doing all this.
If you are talking about an Escrow account when buying real estate,
an Escrow company "collects" all the required documents and funds and distributes them to the appropriate parties.
If you are talking about an escrow account when you have a mortgage, it's where the money for your taxes and insurance are kept and then sent to your insurance company and to tax collector's office.
You do not have to have an escrow account in this case, you can pay your taxes and insurance directly yourself.

Answer 3

At a real estate closing, an escrow account is a safe account set up by an attorney to guard the deposit money until the transaction is done. The attorney makes sure that the money comes in from the buyer, the bank turns it into cash, and the attorney gives it to the seller at the appropriate time. So its an account used to hold money on behalf of a person during a deal.

They may use the same thing when they hold your prepaid taxes and insurance. They are holding your money in a separate account until the transaction ( taxes, insurance payments) is done. That way they know that you are really going to pay for these important things, yet your money is in a separate account and protected.

Answer 4

if your pi payment is 1200 and your taxes and insurance every month are 350 then you pay 1550 each month for you mortage

that extra money you pay goes into an account and you bank pays you insurance company and your taxes for you every six months