Definition: The loan "mortgage escrow" typically refers to a type of escrow account used in real estate transactions where the seller transfers ownership of the property to the buyer, which may involve paying a fee or commission to the title company for this service. In essence, the escrow account serves as a buffer against potential fraud and is used to prevent the sale of a property without the required funds being paid. The definition of "mortgage escrow" can be broken down into its key components: 1. Escrow: This is a type of accounting system where a lender holds the proceeds from a loan payment until the final payments are made or a specific date, such as 60 days after closing, have been made on the property. The money in escrow is typically used to pay off the remaining debt on the mortgage and any other charges associated with the transaction. 2. Loan: In real estate transactions, the borrower typically takes out a loan to purchase a property or refinance an existing one, which is typically secured by the home itself. The lender pays back the balance of the loan over time through monthly installments, known as "mortgage payments." Once the final payment has been made, the escrow account will be released to the borrower. 3. Title Company: This is a third party that acts as the title company for real estate transactions such as these. They are responsible for transferring ownership of property from the seller to the buyer, typically by paying a fee or commission to them. 4. Escrow Account: The escrow account serves as a buffer against potential fraud and is used to prevent the sale of a property without the required funds being paid. It often holds funds in an account until the final payments are made or a specific date, such as 60 days after closing, have been made on the property. This ensures that the seller has enough money available to pay for the purchase. 5. Commission: In real estate transactions, the title company may charge a commission to the buyer for the transfer of ownership of the property to the lender. The amount of this fee can vary depending on the market conditions and the specific terms of the transaction. Overall, "mortgage escrow" is a type of accounting system used in real estate transactions that allows the seller to transfer ownership of their home or other property to the buyer without having to pay any fees upfront.

mortgage escrow

Definition: The word "mortgage escrow account" refers to a specific type of escrow account used in real estate transactions, particularly for home purchase or mortgage payment payments. It is typically used by lenders who are involved in the process of approving loans and then paying off these loans. An Escrow Account is a financial tool that allows property buyers to fund their down-payment on a home loan before they can actually make the full amount due on the loan, which is known as the "mortgage payment" or the "downpayment". This process is called "escrow," and the escrow account acts as a guarantee for the repayment of the loan. The money in the Escrow Account serves as a temporary source of cash until the borrower has received the full amount due on their home purchase. The word "mortgage escrow account" implies that the funds from the down-payment are transferred to this account and then the rest of the money is paid off in regular monthly installments over time, often after 30 or 60 days. The process typically involves the borrower providing all necessary documentation (such as a valid ID, proof of income, etc.) before they can apply for a mortgage. The specific requirements and procedures for obtaining an Escrow Account may vary depending on the lender's policies, but in general, borrowers are required to provide certain documents such as a letter from the bank or credit union, a signed agreement between both parties (e.g., borrower and lender) indicating the loan amount, and a receipt of the down-payment.

mortgage escrow account