What Is An Escrow Account? Do I Need One?
An escrow account is a place to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner’s insurance, mortgage insurance (if applicable), and property taxes. Escrow accounts are a good idea because they assure money will always be available for these payments. If you use an escrow account to pay property tax or homeowner’s insurance, make sure you are not penalized for late payments since it is the lender’s responsibility to make those payments.
An escrow account is a place to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner’s insurance, mortgage insurance (if applicable), and property taxes. Escrow accounts are a good idea because they assure money will always be available for these payments. DLFCU does not require an escrow account for our Home Equity Loans or for our 5 Year Balloon Mortgage Loan.
An Escrow account is set up by your currant mortgage lender. They set aside a portion of your monthly mortgage payment to cover your annual property taxes and your home owners insurance. Escrow accounts are a good idea because they guarantee that these payment will be made. Always make sure that your are not penalized for late payments since it is the lenders responsibility to make sure these payments are being made.