Therefore, for the life of the loan you will be required to keep an excrow account. If you have a conventional loan that has been paid down or increased in value (appraised value) reducing your 1st lein to below 80% you can request escrows be dropped. However, you will be required to pay your property taxes in full each year and purchase a homeowners policy each year.
Reference link: http://titlecompanies.net/
So, when you close on your purchase, you will have already funded the escrow accounts and you monthly payments will begin on the first day of the following month. Your payments will include principal, interest, property taxes, and insurance (PITI). In some cases, you may also have to include mortgage insurance, depending on the type of loan and the loan amount as a percentage of the purchase price.
You're paying the first year's premium up front, and next year at this time the reserve account will pay for another year. That can only be done if you've been paying 1/12th of the premium monthly to go into the account.
Congratulations on your new home!
Brent is correct. But I'm concerned you were not able to ask your agent that has been helping you in your transaction? I hope you had quality representation. As an experienced and successful agent, I provide this information up front and before closing, especially if my clients are first time or even second time home buyers.
I know how frustrating the process can be if you're not familiar with all the details and procedures.
I hope you have a smooth closing and best of luck!
Ebby Halliday Realtors
1415 Legacy Drive, Suite 100
Frisco, TX 75034
Mobile Site: m.sherryrenfroe.com