Escrow Account Basics
Mortgage escrow accounts are special accounts set up in which
money is held to pay for property taxes, fire and hazard
insurance premiums, mortgage insurance premiums, and other
escrow items. Escrow accounts ensure that these items are
paid in a timely fashion. They are a guarantee that there
is always enough money to pay these bills when they are due
so that the homeowner avoids the risk of lapsed insurance
coverage or delinquent taxes.
Guarantee that bills are paid on time. Homeowners do not have
to worry about coming up with several large, lump sum payments,
each with different due dates, throughout the year.
Unexpected increases are taken care of. It is the responsibility
of the mortgage company to allow for possible increases in
tax or insurance premiums.
Mortgage companies typically cover shortages when tax or insurance
payments increase. It is very common for mortgage companies
to pay taxes and insurance premiums when they are due even
though all the money for these bills has not yet been collected
from the homeowner.
Mortgages have lower rates and downpayments because of escrows.
Escrows protect the interest of investors of home mortgage
loans by making them more attractive and secure as investments.
Local governments save money. Escrow accounts also benefit
local governments by providing a more efficient, less expensive
means of tax collection
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let Bancplus Home Mortgage Center help you get the great
financing you want
and deserve!
