What Is An Escrow Account?
An Escrow Account is a type of account where funds are kept safe by a trusted third party while two or more parties complete their deal. The funds are then paid to the seller once they have satisfied all the requirements. However, if the seller fails to fulfill his part, the money is given back to someone who bought it.
WHY ESCROW ACCOUNTS MATTER
The Escrow Account is commonly used in real estate transactions to ensure that both the buyer and seller fulfill their obligations. This arrangement protects both parties from potential fraud or default.
Opening an Escrow Account at Health Care Credit Union
HOW ESCROW ACCOUNTS WORK
Opening the Escrow Account: The buyer and seller agree to use an escrow service to set up an account. This can often be done through a title company or an attorney.
Funding the Account: The buyer deposits the necessary funds into the escrow account. This might include the down payment, closing costs, and other associated fees.
Meeting Conditions: The escrow agent ensures that all transaction conditions are met. This might include property inspections, title searches, and completing required paperwork.
Releasing Funds: Once all conditions are satisfied, the escrow agent releases the funds to the seller, and the property ownership is transferred to the buyer.
How do I set up an escrow account?
Lenders may require you to set up Escrow Accounts with neutral third parties (we’ll call them middlemen) to make sure there is always money to cover the following annual Mortgage costs:
Homeowner’s Insurance
Mortgage Insurance
Property taxes
HOW ESCROW ACCOUNTS SIMPLIFY CREDIT UNION MORTGAGES
When you secure a Mortgage with Health Care Credit Union, an Escrow Account is set up to manage your property taxes and insurance payments. Each month, a portion of your Mortgage payment is deposited into this Escrow Account. When your property taxes and insurance premiums are due, we use the funds from this account to pay them on your behalf. This ensures that these critical payments are made on time, providing peace of mind and simplifying financial management.
By handling these payments through an Escrow Account, Health Care CU helps you avoid the hassle of remembering due dates and ensures that your home remains properly insured and your taxes are current.
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Members with Mortgages at Health Care CU can open traditional Escrow Accounts.
If you want to open an Escrow Account without an HCCU Mortgage, you can apply for a Sub-Savings Account to help pay for your property tax and homeowner’s insurance.
NEED HELP UNDERSTANDING WHAT ESCROW ACCOUNTS ARE?
At Health Care CU, we're here to help you understand what is an Escrow Account and manage it. Please contact us if you have any questions or need assistance setting up an escrow account. Our team is dedicated to providing the support and information you need to handle your financial transactions confidently.
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