Escrow

What is Escrow?

Escrow is defined as money placed in the hands of a third party until specified conditions are met.

Escrow Explained

An escrow is a financial instrument a third party holds on behalf of the other two parties in a transaction. The escrow service holds the funds until it receives the appropriate written or oral instructions or until obligations have been fulfilled. Securities, funds, and other assets can be held in escrow.

In housing, an escrow is funds held in an account to be used by the lender to pay homeowner’s insurance and property taxes.

What is an Escrow Account?

An escrow account is a separate account into which the lender deposits a portion of each monthly mortgage payment; it provides the funds needed for expenses such as property taxes, homeowners insurance, mortgage insurance, etc.

Escrow Funds are money held in reserve by a mortgage company to pay taxes, insurance, and other mortgage-related items when they are due.

Escrow Analysis is the periodic examination of escrow accounts by a mortgage company to verify that monthly deposits are sufficient to pay taxes, insurance, and other escrow-related items when due.

What is back-to-back escrow?

It’s the arrangements that an owner makes to oversee the sale of one property and the purchase of another at the same time.