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Escrow account or also known as the impound account offers a lot of benefits to both borrower and the lender. Even though the escrow account was primarily created for those people who wanted to protect the lender or the loan servicing company from financial interest, borrowers find it as a very beneficial account as this helps them in budgeting the insurance and taxes. An escrow account offers a lot of advantages and one of them is the advantage of convenience. Many people have their own escrow account because the lender or loan servicing company requires it when you purchase a house or apply for a loan. In most cases the lender requires first-time homebuyers or borrowers to have an escrow account. It another way for lenders to protect their investment and will make it easier for the borrower to budget for expenses like property taxes and homeowners insurance. Escrow accounts are specifically designed to protect loan servicing company, while also offers benefits to loan borrowers.
How Do Escrow Works
The escrow account has its own escrow agent, the escrow agent usually is a third party. Most of the time it is an attorney, a real estate agent, or a title company agent. The whole idea of an escrow account is to ensure that everything that happens during the transaction runs smoothly without any problems. It even includes the transfer of money and even paperwork or documents. Escrow account are there to protect all the relevant parties that are involved in the transaction, it makes sure that no fund from the loan servicing company and property will be changed until every condition and agreement is done. During the process of buying a property, all the paperwork and documentation is filed by your escrow agent. When all the conditions are met without any problems the transaction is then finalized, during the finalization any money due to the seller will be transferred from the lender to the seller.
Written down below are the best advantages and benefits that you can get from an escrow account.
Making Sales Easier
If you ever have decided to buy or sell a property, it should be easy and no problem. Escrow accounts ensure the sales that are protected from any underhanded management or fraud that are very common in the real estate business.
Offers Benefit To Buyer
For interested buyers, escrow accounts offer a lot of benefits. One of the benefits that a buyer can get from an escrow account is that it allows the escrow account to track and the process even verifies when it is done. The seller will never receive the payment until you can get the satisfaction you need and all the terms are met.
Offers Benefit To Seller
Escrow accounts confirm that each agreement and terms have been met with full satisfaction before closing the deal and sale. The transaction can only be approved once the escrow account verifies the funds. This will give the seller a huge benefit, and even gives the seller the best experience he needs.