Your Lake of the Ozarks Mortgage Lender: understanding escrow accounts

Wednesday, May 23, 2018

Understanding Escrow Accounts

As a first-time home buyer, you're introduced to a variety of terms that you may have never heard before. As your Lake of the Ozarks mortgage lender, I'm here to help you understand every aspect of the mortgage process. Today's blog focuses on escrow accounts, what they are and what it has to do with you and your mortgage at the Lake of the Ozarks.

What is an Escrow Account?

In the mortgage industry, an "escrow account" refers to an account setup by your lender to hold the money that will pay certain property-related expenses. This includes your homeowner's property taxes and homeowner's insurance. Many lenders require this account to ensure that these expenses are being paid in full and on time.

How Does an Escrow Account Work?

A portion of each month's mortgage payment will go into this account to cover these expenses. Rather than receiving a big bill once or twice a year to pay these expenses, they will be paid through your lender out of this account. This breaks up the payment into smaller pieces so that you don't have to come up with all the money at once. Instead, you are able to pay all your mortgage-related expenses in one easy monthly payment. It's just less bills that you have to worry about.

Escrow Account Advice

While escrow accounts are often required by your lender, that's not always the case. In the event an escrow account is not mandatory, you should consider electing to have one. Without one, you will have to plan on paying these large expenses yourself. You will need to carefully budget for these expenses so they don't catch you by surprise. If you fail to pay your property taxes, you could be fined, have a tax lien placed on your property or even face a foreclosure on your property.

For any questions regarding escrow accounts or home loans at the Lake of the Ozarks, give the best mortgage lender at the Lake of the Ozarks a call at 573-746-7211. I'm here to work with you every step of the way! I'll discuss your options, offer competitive interest rates and back it up with the first-class service you deserve. Let me help you into your dream home at the Lake of the Ozarks!

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