Hey guys, I received a couple of follow-up questions to my previous post, “What Is An Escrow Account.” Some folks are wondering if an escrow account is mandatory. Well…some lenders do require it, especially if you have less than stellar credit. The escrow account helps prevent foreclosures from people not paying their taxes or their insurance. But it will vary from lender to lender. Make sure you discuss whether you will need an escrow account when you are selecting your lender.
Another question I received was what happens if there are shortages in your escrow account…i.e. you owe more taxes than you have escrowed? Sometimes the lender will underestimate what the cost is going to be. If that happens, the lender will let you know and you will be responsible for paying that difference. Lenders are always monitoring these accounts and will let you know where your account stands.
If you guys have any other questions about these escrow accounts, please don't hesitate to reach out. I can put you in touch with an amazing lender to answer all your questions for you!
You can email me at Kimberly.Moon@eXpRealty.com, text me/call me at 214.783.4292 or visit me at www.kimberlymoon.com. I look forward to hearing from you!