Escrow
When you take out a mortgage you will go through the escrow process. This process makes sure that all of the conditions of the sale are met and that everyone gets paid or receives the appropriate titles or paper work.
In short escrow is when you give an impartial third party money, titles or other items to hold on to. It is the escrow agent’s job to hold on to these items until all the conditions of the loan are met. Once all the conditions are met the agent will then give the money, title or other items to the appropriate party.
Escrow also means an account you keep to pay taxes and insurance on the home. In most cases a mortgage company will require you to open an account so that they are sure you are always paying your taxes and insurance. You will place money into the account every month. This is usually part of your mortgage payment. This money is then used to pay your taxes and insurance when they are due.
© 2007 Scottie Watts