Top Things to Know About Real Estate Escrow Services

You are ready to purchase the perfect home, office or piece of property. Your purchase price will include taxes and insurance. You can combine these debts into one monthly payment known as escrow. Before you escrow your purchase, here are the top things you should know about real estate escrow services.

• Escrow is actually the amount of money for your taxes and insurance.




• The mortgage payment is combined with the taxes and insurance bills to create a total monthly escrow payment on your property.




• The escrow portion of the mortgage is also called T & I, for Taxes and Insurance.




• Escrow is sometimes required by the lender to ensure that taxes and insurance are maintained during the life of the loan. This is always true for FHA (Federal Housing Administration) loans.




• Escrow may be optional, depending on the mortgage or loan company.




• Escrow payments are determined by the projected insurance and tax bills for the upcoming year.




• If the projected amount is too high or low, the payments will be adjusted for the following year.




• Usually, there is no additional charge or refund in the case of inaccurate escrow projections; adjustments are made to compensate during the following year.




• Escrow payments may change annually due to the escrow analysis process that is required on an annual basis.