Escrow
Last modified June 7, 2023Escrow is a deposit of money made by the buyer to the lender for the purpose of paying future items as they become due, specifically hazard insurance premiums, property taxes, CDD assessments, mortgage insurance premiums and flood insurance premiums, if required. The total amount of these items is calculated for the year then divided by 12 so that one twelfth of the amount can be added to the monthly payment made by the buyer to the lender. The lender then deposits this money into an escrow account on behalf of the buyer where it is held until the time that the taxes or insurance payments are due. The lender pays these items directly for the buyer.
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