Home Buying in Resaca>Question Details

Gina, Home Buyer in Resaca, GA

is it better to buy a home that is insured with escrow?

Asked by Gina, Resaca, GA Wed Mar 23, 2011

ok looked at a few houses that are insured with escrow also some that aren't what does insured with escrow mean and is it better to do the escrow thing or not? thanks

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Escrows accounts are mandatory on Conventional loans (Fannie Mae & Freddie Mac) that are over 80% of the homes value. Unless you have a 1st and 2nd lien, therefore avoiding the over 80% rule on the 1st lien. Government insured loans (FHA, VA & USDA) require escrow accounts regardless of the Loan-To-Value. 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/
2 votes Thank Flag Link Thu Jun 11, 2015
I think you're referring to an escrow account that handles insurance. The escrow itself doesn't insure any part of a home purchase.

You often don't have a choice, and it's not something to worry about. It means that the mortgage lender will require funds for your home owners insurance (and usually property taxes as well) to be placed in "Escrow". The account will be held by the lender directly, so they take the money monthly along with your mortgage payment all in payment. Then, when your insurance bill is due, the lender pays the insurance bill from those funds. Same thing when taxes are due.

When you sell the home, the lender will send you any remaining money in the escrow account. A few lenders do have trouble remembering to pay those bills, so always read your mail from the taxing authority and the insurance company to make sure they are paying the bills on time.

Best of luck!
1 vote Thank Flag Link Wed Mar 23, 2011
Insured with Escrow? Talk to your agent and ask them to define this term since it doesn't exist in my list of Real Estate terms.
0 votes Thank Flag Link Wed Mar 23, 2011
Great answer, Jonathan. Exactly. Gina - you must be speaking with some real estate people who need a translator in Resaca.
Web Reference: http://intowninsider.com
0 votes Thank Flag Link Wed Mar 23, 2011
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