What Is Escrow and Why Is It Needed? ESCROW ACCOUNTS OFFER PROTECTION FOR HOME BUYERS AND SELLERS - AND FOR MORTGAGE LENDERS, TOO. LEARN ABOUT REAL ESTATE ESCROW, ESCROW ACCOUNTS AND HOW THEY FUNCTION ONLINE.
What Is Escrow?
While escrow is typically linked to real estate, it can extend to other major financial transactions.
In a major financial transaction between two parties, escrow is defined as an impartial third party that holds a valuable asset (usually cash) until the transaction is complete.
Mainly, there are three types of escrow - real estate escrow, online escrow and escrow accounts:
Mortgage lenders typically insist on a real estate escrow account for the buyer prior to the purchase, before any home inspection or disclosures on the home's condition are completed. Once the buyer and the lender knows the property is in satisfactory condition, the money from the escrow account is released on the home purchase closing date.
REAL ESTATE ESCROW
An escrow account is used after the
Escrow
buyer moves into the home, as the
account
insurance out of the escrow account,
mortgage lender pays money owed on property taxes and homeowners
funded by the buyer.
Sources: https://www.thestreet.com/personal-finance/realestate/what-is-escrow-14638366 https://artesiantitle.com/