When you set out to buy a home, you come across several other homebuyers who show interest in the property you like as well. Several buyers make an offer in an attempt to buy the home they love from top-selling real estate agents Raleigh NC, but only one offer is accepted. If your offer is accepted, you are required to come up with deposit money known as earnest money. With support from real estate agent Raleigh, you must deposit this amount into an escrow account to show the seller your willingness and seriousness of buying.
What Is an Escrow Account?
A real estate transaction consists of several parties, from the buyer to a seller to the best real estate agent in Raleigh. In addition to the best real estate agent Raleigh, who acts on behalf of the buyers and sellers, there exists another party that supports the transaction and holds the escrow account. An escrow account is an account that is held by a third party on behalf of the real estate buyer and seller until the transaction is complete. The third party to the transaction must be a trusted one who will secure the fund in a trust account.
Escrow Account Before Buying a Home
When you make an offer, and the offer is accepted, you are required to deposit earnest money into a short-term escrow account. Once the deal closes with the help of the top real estate agent in Raleigh, you sign all the necessary documents, and the earnest money from the escrow account is released. You can use the amount as a down payment or mortgage closing cost. But, if you decide not to buy the home, you may not get the earnest money back. Some of the best real estate agents NC say that the amount in the escrow account is typically kept by the seller. In addition, the fund will be returned to the buyer if the seller fails to deliver their obligations as in the escrow agreement.
Escrow Account After Closing the Mortgage Loan
After closing the short-term escrow account, your lender opens a second escrow account. The second account will be used through the life of your loan. Some of the top-selling real estate agents NC also help you understand what the second escrow account means and why you need it. You enter into the escrow account when you sign the mortgage contract with your lender. Your lender will calculate the additional amount required to maintain the mortgage while calculating your mortgage payment. Real estate agent Cary NC says this is a trusted practice as the extra amount is deposited into your escrow account. The amount deposited is used when your homeowner’s insurance payments or property taxes are due. The lenders will dip into the account and make the payment if you fail to pay.
Top real estate agents Raleigh NC support an escrow account as the government will not place a lien against your home for any unpaid property taxes or missed monthly payments. You may have to repay some of the escrow costs at closing, but if you do not miss any payments, then there is nothing to worry about. Talk to any top real estate agent Raleigh, and you will be offered all the benefits of opening an escrow account.