Is it a place where you just hold money? can someone help me out with this? I am starting a virtual market and I am coming up on the transaction part. I don't want to completely help them with the transaction there is too much liability and work to be done. What is an escrow account? Do I just hold money there for a fee? Or do I have to do something else?
2007-12-20 09:21:30 · 6 answers · asked by bboyballer112 2 in Business & Finance ➔ Renting & Real Estate
Money typically deposited into your escrow account are set aside to pay for your taxes and home owners insurance by your mortgage company.
2007-12-20 09:29:30 · answer #1 · answered by Slapshot27 4 · 0⤊ 0⤋
I don't really understand your question.
The definition of an escrow is a third party that holds funds and make sure all legal issues are complete in the sale of a commodity, property or business.
In other words if you are selling something you would open an escrow to complete the transaction so that you can ensure that all the legal aspects that are unique in your state have been accomplished before any funds are transferred.
This type escrow my remain open for as long as the seller and buyer agree as long as the escrow instructions dictate a closing date and terms and conditions on which it should close.
They make sure the buyer get what he is suppose to get and the seller get what he is suppose to get prior to closing an escrow.
Another type escrow is is one that is set up in a real estate transaction whereas a mortgage company holds money paid on a monthly basis to the mortgage company for the purpose of paying taxes and insurance. This is normally a requirement imposed by lenders when the loan balance is 80% or better.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-12-20 12:15:47 · answer #2 · answered by loanmasterone 7 · 0⤊ 0⤋
In terms of a mortgage, an escrow account is paid into on a monthly basis. This money is used by the mortgage holder to pay taxes, insurance and other things on the house. An escrow account in the mortgage serves many purposes. First, it is a source of investable revenue for the mortgage holder. Banks can use this money to their advantage. For the homeowner, this money is "saved" on a monthly basis so when tax time and insurance premiums come due, there is not a large outlay of cash for the homeowner. For one who manages money well, it is better to invest those dollar amounts and earn interest for yourself.
2007-12-20 09:33:04 · answer #3 · answered by Barbara A 5 · 0⤊ 0⤋
Generally, no. Most mortgage companies gave a rate discount on your interest rate when you took out the mortgage for escrowing. This is to ensure that there is never a lien, as long as you make mortgage payments. Once the account is set up, they generally will not drop it.
2016-04-10 10:10:47 · answer #4 · answered by Anonymous · 0⤊ 0⤋
The escrow account is to hold funds until the contract is fulfilled. In a real estate escrow, the buyer would bring the cash in and the seller would give the buyer a deed to the real estate.
2007-12-20 09:31:15 · answer #5 · answered by William H 5 · 0⤊ 0⤋
It gains interest when you pay your rent on time.
2007-12-20 09:28:26 · answer #6 · answered by bonstermonster20 6 · 0⤊ 0⤋