What is an ESCROW account and how much do I have to pay?
Your lender may require that you have an ESCROW account. This is an account the lender maintains on your behalf to pay your property taxes and insurance premiums as they become due. ESCROW accounts maintained by your lender are regulated by the federal Real Estate Settlement Procedures Act (RESPA). At closing, lenders are permitted to collect a pro rata portion of the estimated annual real estate taxes and property insurance payments that you will owe in the first year of your loan plus a cushion that may not exceed two months of escrow payments. The cushion is to ensure that there is enough money in your ESCROW account to make the payments on time. If not provided at closing, the servicer of your loan must furnish you with an Initial ESCROW Account Statement within 45 days. This statement details expected escrow payments, disbursements and balances for the upcoming 12-month year. You will receive an Annual ESCROW Account Statement at the end of each year showing the previous year’s ac
Related Questions
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