Facts About Closing Escrow AccountsChances exist in plenty that if you are buying a property, and/or have taken loans to pay the installments, you already have an escrow account. In the beginning, it may turn out to be rather useful, but after you are through with your property and loans related needs, you would have to think of closing escrow accounts. Right? But, at first, let's find out what's exactly do you understand by Escrow accounts? More importantly, what's Escrow? It is basically a type of exchanging or transferring property and/or money. It involves a third, or a neutral party, for the said purpose. Escrow helps both the involved parties minimize or reduce their risks. Escrow holds the original documents, besides the real estate deeds for the said purpose. The mortgage escrow accounts are special savings account. Such an account ensures that the person, who owns the house, pays his property taxes, fire and hazard insurance premiums, mortgage insurance premiums, and other escrow items when the time of their payment comes. They are, in fact, a sort of assurance that there is always sufficient money to settle the bills when they are due to ensure that the owner of the house is not crippled or burdened with the risk of lapsed insurance coverage. The money in the account of the customer covers the customer's likely real estate taxes and home insurance. The law suggests that one month in every year, the customers' escrow account has no more than one-sixth of his total insurance and tax bills. For instance, if the annual total is, say, $3600, then there should be a month during the year when the customer's account has no more than $600 in it. Closing Escrow Accounts While finalizing the home sale, a neutral third party or the escrow holder, or the escrow agent is suitably engaged with a view to ensuring that the transaction is closed properly, and on time. Escrow holder's duty is to ensure that all the terms and conditions of the seller's and buyer's agreement are addressed in the best possible manner before the sale is actually finalized or executed. This includes, amongst others, receiving funds and documents, completing the needed forms, and getting the release documents for loans which have been settled with the transaction, assuring the customer clear title to his property before the purchase price is completely and thoroughly settled. Suffice to say that properly closing escrow accounts, after the customer's purpose is solved, is in no way less important or critical than having a new Escrow account. To tell the truth, the trick lies in the fact how best, with the best possible results, you are able to do both of them. |