How is my escrow amount determined?
If you’re about to begin the escrow process, you probably have plenty of questions. That’s totally okay! We at Neighborhood Escrow are always happy to answer all of your questions and concerns before, during, and after the escrow process. One question we often hear from people who are about to begin the escrow process is, “how is my escrow amount determined?”
Escrow basics
But first, before we get into answering this burning question, let’s make sure you understand the basics of escrow. In essence, escrow is a process that enables a neutral third party (the escrow company) to hold money and documents on behalf of all parties involved in a real estate transaction. In most cases, these parties include the buyer, seller, lender, and borrower. During an escrow transaction, the escrow company’s agent is responsible for following all the instructions given by each of the parties. Before closing, the escrow company’s agent makes sure all requirements described in the Residential Purchase Agreement and Joint Escrow Instructions are followed effectively before the transaction is complete.
Having an escrow agent is really important because it’ll give you tremendous peace of mind throughout your real estate transaction, whichever party you may be. When you rely on an escrow agent, you’ll be confident that no money or property will change hands until all the purchasing conditions that each party has agreed to have been effectively met and all instructions have been carefully followed.
How is my escrow amount determined?
Now for the main question at hand – determining your escrow amount. Your escrow company, Neighborhood Escrow, will estimate how much your taxes and insurance costs will be over the course of the next 12 months. This amount will be based on your loan closing documents, taxing authority, and insurance company. Then we’ll divide that by 12 and add it to your monthly mortgage payment. We’ll calculate whether your account maintains the minimum balance required throughout the year, or if your payment needs to be adjusted so your account remains balanced.
Got more questions?
As always, we’re here to answer your escrow-related questions. Feel free to contact us by calling 310-378-2456 or emailing debbie@neighborhoodescrow.com. We have over 41 years in the escrow business, and we’re always glad for the opportunity to put our expertise to work for you.
Our goal is to provide professional, highly personalized escrow services to every buyer, seller, lender, and borrower who turns to us to handle their escrow process. Rest assured that we’ll handle all your escrow needs with a high level of professionalism and utmost accuracy. Let us help you make sure your escrow process goes off without a hitch – we take our role very seriously. Discover why so many people turn to us for all their escrow needs – call us at 310-378-2456 today!
