Main Contact: Drew C. LaBarbera, RMLO
NMLS: 260569
2104 Green Hill Drive
McKinney, TX 75070
Phone: 903-814-2344 Fax: 214-237-4070
Español: 214-683-5023 Email: drew@planwealth.net

Main Contact: Drew C. LaBarbera, RMLO
NMLS: 260569
2104 Green Hill Drive
McKinney, TX 75070
Phone: 903-814-2344 Fax: 214-237-4070
Español: 214-683-5023 Email: drew@planwealth.net


Wednesday, February 21, 2024
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Escrow Account Basics

Mortgage escrow accounts are special accounts set up in which money is held to pay property taxes, fire and hazard insurance premiums, mortgage insurance premiums, and other escrow items.

Escrow accounts ensure that these items are paid in a timely fashion. They guarantee that there is always enough money to pay these bills when they are due so that the homeowner avoids the risk of lapsed insurance coverage or delinquent taxes. With escrow accounts, homeowners do not have to worry about coming up with several large, lump sum payments, each with different due dates, throughout the year.

With escrow accounts, unexpected increases are taken care of. It is the responsibility of the mortgage company to allow for possible increases in tax or insurance premiums. Mortgage companies typically cover shortages when tax or insurance payments increase. It is very common for mortgage companies to pay taxes and insurance premiums when they are due even though all the money for these bills has not yet been collected from the homeowner.

Mortgages have lower rates and down payments because of escrows. Escrows protect the interest of investors of home mortgage loans by making them more attractive and secure as investments. Escrow accounts also benefit local governments by providing a more efficient, less expensive means of tax collection.

Drew LaBarbera, RMLO DBA Planwealth Financial Services
NMLS: 260569 | Company NMLS: 353562

Drew LaBarbera, RMLO DBA Planwealth Financial Services
NMLS: 260569 | Company NMLS: 353562