What is 'Escrow Account'?
By John Veler
A friend of mine who is starting to sell house by owner asked me a question about escrow account and I decided to write this post as I think that there are some more people who don’t know what it is. It doesn’t matter whether you sell a house or buy a house, you have to get through an escrow period. An escrow account is a banking account established by the lender who wants to make sure all the bills are paid such as homeowner’s insurance, private mortgage insurance and some taxes. The lender doesn’t rust you so he wants to reinsure. Every month the credit receiver deposits money to the escrow account. The lender withdraws the necessary sum and pay the due bills and liabilities concerning the property. According to the terms and conditions of some loans or lenders, the borrowers can be a...