Insert Currency into the Escrow Agreement and eSign it in minutes

Aug 6th, 2022
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How to Insert Currency into the Escrow Agreement

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[Applause] [Music] hey folks Todd Tremonti here with market experts Realty in the Tatra Monty home selling team with another weekly QA video this week our question is what is an escrow account now this word escrow gets used a lot throughout a purchase or sale or even an investment transaction and it can be used in a few different ways today were going to focus on this idea of an escrow account and Ill give you a little bit of context around kind of when that would be used and why but the short answer to the question is an escrow account is a bank account that holds funds in sort of a neutral third party type situation in Texas most escrow accounts are really managed through title companies in a residential transaction and its where money like earnest money would be held now we have another video on what is earnest money so I wont get into that too much but its money thats being held kind of in between the buyer and the seller and and those funds whats done with them is dictated

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Lets take a look at the pros and cons of escrow accounts. The Pros. Lower mortgage costs. Your lender is responsible for making the payments. No need to set aside extra funds each month. No big bills to pay around the holidays. The Cons. Escrow accounts tie up your funds.
In real estate, an escrow account is a secure holding area where important items (e.g., the earnest money check and contracts) are kept safe by an escrow company until the deal is closed and the house officially changes hands.
In essence, an escrow is a type of legal holding account for funds or assets, which wont be released until certain conditions are met. The escrow is held by a neutral third party, which releases it either when those predetermined contractual obligations are fulfilled or an appropriate instruction is received.
Youll submit a cashiers check or arrange a wire transfer to meet the remaining down paymentsome of which is covered by your earnest moneyand closing costs, and your lender will wire your loan funds to escrow so the seller and, if applicable, the sellers lender, can be paid.
Your lender will take care of them for you and pay them on time. The only real downside to escrow is if you prefer handling taxes and insurance payments on your own. You lose a little control over that because your money will be tied up in the escrow account and managed by your lender.
Generally, an escrow account is a prerequisite if youre not putting at least 20% down on a home. So unless youre bringing a sizable chunk of cash to the closing table, escrow may be unavoidable. FHA loans, for example, always require buyers to set up escrow accounts.

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