Escrow services – this term often appears when people buy or sell properties. More often than not, property buyers or sellers freak out when they hear these words mainly because it sounds foreign to them. A lot of terms actually sound foreign when you’re a first time property buyer or seller that’s why it’s important that you become familiar with them. People have the tendency to shy away from escrows and deem it unnecessary when in reality, these escrows can spare them from possible property-related issues that may arise in the future.
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Derived from the Old French word “escroue” which means a parchment scroll or a paper scrap, escrow is an indication that an independent third party took hold of the payment until all agreements were met. An escrow is a contractual agreement where an objective and unbiased third party handles the payment of the funds that the buyer and the seller need to settle. This kind of setup provides protection for both the buyer and the seller by keeping all of the payments in a secure escrow account. The money is released only when everything mentioned in the agreement are met and overseen by officials from the chosen escrow company.
An escrow account, established by the broker, is essential when a huge amount of money is involved in the transaction, and there are numerous obligations and agreements that need to be fulfilled before the release of payment. Escrow is a fair setup and it makes sure that neither the buyer nor the seller will be shortchanged.
An escrow payment is a part of the mortgage payment which is set aside for payments of hazard insurance and real property taxes. This amount is “over and above” the interest and principal portion of the mortgage payment. Customers are often required by mortgage companies to open and maintain an escrow account so there’s a guarantee that they will have enough money to settle the hazard insurance and property taxes. Other mortgage companies, however, give their customers the option not to open an escrow account for as long as they know what the repercussions are. Loans from the Federal Housing Administration and other companies or organizations require lenders to maintain an escrow account for as long as the loan exists.
While there are fixed interest rates, changes with the monthly mortgage payments are still possible during the life of the loan. These are caused by changes in insurance premiums and property taxes. If for example an insurance premium has an increase of about $120.00 each year, that will automatically translate to a monthly increase of $10.00 in the escrow payment to accommodate this change. According to guidelines set by the RESPA, it is important that escrow payments are recomputed once a year to make sure that changes in the insurance and property taxes are well accounted for. This re-computation and evaluation is known as escrow analysis.
Some Jacksonville escrow companies exist online and to avoid being scammed, one must check the validity of their license through the regulating authority. You can access the license through their official company website so you’re sure that you’re dealing with a legit escrow company in Jacksonville, FL and not some fly by night businessman who’s out to scam people.
While it’s imperative that an escrow closer remains unbiased and impartial while the escrow process is still ongoing, he or she must still be courteous when it comes to dealing with the two parties involved. This will make way for a positive flow of communication, which makes problems and issues much easier to resolve if ever they arise at some point during the transaction. It’s essential that an escrow closer behaves professionally, and sticks to the escrow instructions of both parties.
These escrow instructions are documents that show the escrow closer about the specific procedures that need to be followed for the escrow to be closed. Escrow instructions often show the following details:
It is important that escrow instructions are clear and detailed because the escrow closer is not allowed to go beyond what is stated. He or she may only follow and stick to what is agreed upon and written in the escrow instruction.
There are duties and responsibilities that all parties involved must do while the escrow process is still ongoing. The seller must hand over the executed deed to the buyer, evidence of repairs and pest inspection, insurance policies, tax receipts, equipment or home warranties, and details of mortgage holders to the escrow closer. The lender is responsible for handling all the proceeds of the buyer’s loan, and telling the escrow closer about the conditions and limitations of the funds. The escrow closer is then in charge of :
The escrow is closed once all of the terms and conditions for the escrow instructions are fulfilled.
If you’ve reached this part of the article and you still don’t know how to go about escrow, don’t worry, we have you covered. You can approach the experts at Attorneys’ Title Services, LLC, a team of lawyers and title providers based in Jacksonville, FL. They offer closing, title insurance, and escrow services to lenders, developers, homebuyers, and realtors. Their licenses are recognized in all twelve states, plus the U.S. Virgin Islands. They have nineteen strategic locations all over the country, each offering closing services in Jacksonville. They started as a lending law firm but as the years went on, they became national title providers. Their background in law and their familiarity with legal documents allow them to easily spot defects in titles, which is one step towards avoiding legal issues.
Should you wish to face-to-face meeting with their team, you can drop by any of the three offices they have in Jacksonville: the main office is at Mandarin on San Jose Boulevard, while the two offices are at Ponte Vedra and Downtown Jacksonville. Their office is also updated with the latest technology so they can receive all the necessary documents from your lender flawlessly and in good condition. Attorneys’ Title Services is committed to giving you accurate information, and a hassle-free closing experience.
For more information, feel free to give us a call at (904) 260-0105, or send us an email. Our office opens at 9:00 in the morning and closes at 5:00 in the afternoon from Monday to Friday.