Escrow Agent Figuring How Escrows and Escrow Accounts Function
June 24th, 2009
Talking about escrows as it pertains to mortgages and real estate, we refer to two different subjects: the sales agreement of a house (referred to as escrow) and the mortgage escrow account (funds set aside for incoming expenses while the loaner holds the note to your house). Let’s take a brief look at both of these concepts so you can be better prepared when you decide to buy your first home and take on a mortgage.
Escrow
Buying a house is not simple. With really few exclusions, it will be the biggest financial conclusion you will ever make and will mean that you have an obligation to your lender for many years to come to pay down your mortgage note. It is essential that when you buy a House that particular processes, rules and paperwork be pursued and signed. In almost all real estate transactions you will be Looking At with a neutral third party called the escrow holder (or escrow agent). What escrow agents do is to guarantee that the needed papers are all in place, both parties follow the contract provisions and are protected.
Escrow agents make certain that all the papers are obtained and registered and that all specifications in the agreement are met before the sale is settled. They will require a title search to ensure that the house is free of any complications. They are in charge of receiving the funds from the buyer and releasing them to the seller only when the sale has been finalized.
An escrow agent will never give advice to either party. They are to remain neutral.An escrow agent is to stay neutral and unbiased to both purchaser and seller. He or she may not give advice to both. If you suspect that your escrow agent is not being neutral you should directly inform your mortgage lender and realtor.Inform immediately your mortgage lender if you suspect that your escrow agent is not being neurtal. They also will not provide tax advice or opinions on your mortgage. Again, they are there to make certain all the t’s are crossed and I’s are dotted - they are not there to get included personally in any way.They may not offer tax advice, opinions regarding your mortgage and be affected in any way personally. They are there to make sure that everything is in place.
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