Difference between revisions of "Escrow"
(New page: Escrow is the money or a written instrument such as a deed that, by agreement between two parties, is held by a neutral third party (held in escrow) until all conditions of the agreement a...) |
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| − | Escrow is the money or a written instrument such as a deed that, by agreement between two parties, is held by a neutral third party (held in escrow) until all conditions of the agreement are met. | + | '''Escrow''' is the money or a written instrument such as a [[deed]] that, by agreement between two parties, is held by a neutral third party (held in escrow) until all conditions of the agreement are met, at which time it is released. |
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| + | Escrow is commonly used when dealing with real estate, where under the terms of a mortgage, an account is established (and funded by a portion of the mortgage payments) to pay property taxes and hazard insurance (so to protect the lender's interest). It is not required if the house has substantial equity (such as a large down payment made); however, most mortgages have a clause requiring proof of payment for taxes and insurance, and if not shown the lender can "force place" a policy and/or pay taxes, then establish an escrow account and require repayment. | ||
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| + | [[Category:Legal Terms]] | ||
| + | [[Category:Real Estate]] | ||
Latest revision as of 20:54, January 26, 2019
Escrow is the money or a written instrument such as a deed that, by agreement between two parties, is held by a neutral third party (held in escrow) until all conditions of the agreement are met, at which time it is released.
Escrow is commonly used when dealing with real estate, where under the terms of a mortgage, an account is established (and funded by a portion of the mortgage payments) to pay property taxes and hazard insurance (so to protect the lender's interest). It is not required if the house has substantial equity (such as a large down payment made); however, most mortgages have a clause requiring proof of payment for taxes and insurance, and if not shown the lender can "force place" a policy and/or pay taxes, then establish an escrow account and require repayment.