Friday, April 1, 2016

How Do Escrow Accounts Work in Eugene?

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Today, we’re talking about how escrow accounts work. An escrow account is essentially a money-holding tank. It’s when a third party, such as a loan officer or escrow officer, holds on to a homeowner’s money to pay certain property related expenses. The third party collects and documents the money associated with a particular transaction.

Secondly, an escrow account can be used to pay a mortgage. The lending company can collect the money taxed from mortgage payments.

An escrow account, thirdly, can be used when a party purchases a home and the funds are held on to prior to the final transaction. These funds are referred to as earnest money, which is part of your down payment. It ultimately shows the seller you’re earnest about buying their home. Depending on which loan program you choose and qualify for, you might be required to have an escrow account, especially if you’re paying less than 20% down.

How much is the average fee for the service of an escrow account? The average cost is usually split between the buyer and seller. Typically, it costs approximately $200 and $3 per every $1,000 the home costs. For instance, a $200,000 home would cost you $800, from $600 (from the $3 per $1,000) and additional $200 fee. Split that fee in half between two parties and you have $400.

If you’re thinking about buying or selling a home in the surrounding Eugene area, give me a call or send me an email. I’d be happy to answer any questions you might have!

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