Many home owners have received their property tax bill for 2009 in the mail. Unless you own your home free and clear, your bill generally will state:
This Is Not A Bill - Do Not Pay!
To many first time home owners and especially to many future first time home buyers wanting to purchase a Lakeland Real Estate, this is a new terminology to them. The bill also states that your bill has been forwarded to your Escrow Agent.
One of the things I love most about my job as a Lakeland real estate professional is that I get to educate my buyers about the real estate purchasing process. With a doubt, a term that is often not very well understood by new Lakeland home buyers is the term Escrow Account. So, I’ve written down a brief overview for you here.
An escrow account is a specially designated savings account into which funds are deposited for a defined purpose.
With respect to Lakeland real estate and mortgages, your escrow account is used to hold money in a neutral account prior to closing, and later to pay real estate tax bills and homeowners insurance payments.
Once your mortgage is in effect, escrow accounts are managed and disbursed by lenders or their designated servicing companies.
Lenders generally require, whether you opt for an FHA, VA guaranteed or a conventional mortgage, that you “escrow” your scheduled monthly home owners insurance (hazard insurance) as well as a set amount for your property taxes. The lender basically wants to be sure that you will be able to cover these bills when they come due. When the time does come for them to be paid, your lender cuts a check to each entity from your escrow account. You do not have to pay these bills directly.
Authored by Petra Norris
Managing Broker - CDV TransAtlantic, Inc.
(863) 619-6918
