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If youre buying a home in Canada, its possible that youll never hear the term escrow used by your lender when youre setting up your mortgage. The more commonly used term is property tax account. But thats OK.
With a mortgage escrow account, you make monthly payments to the lender for your property taxes and homeowners insurance. This money is added to your monthly mortgage payment and is held by the mortgage company. They pay your property taxes and homeowners insurance when they are due.
Pros of an escrow account Having your mortgage lender or servicer hold your property tax and homeowners insurance payments in escrow ensures that those bills are paid on time, automatically. In turn, you avoid penalties such as late fees or potential liens against your home.
The Benefits Of An Escrow Account It can also protect you as a homeowner, ensuring you have the money to pay for property taxes and homeowners insurance when the bills arrive. Youll find that there are a few other great benefits for home buyers, owners and lenders, too.
Escrow Deposit: 5-10 days The money will be held by an independent escrow agent, not involved in the transaction, and this will ensure that your money is safe even if the deal falls through for some reason.

People also ask

When you close on a mortgage, your lender may set up a mortgage escrow account where part of your monthly loan payment is deposited to cover some of the costs associated with home ownership. The costs may include but are not limited to real estate taxes, insurance premiums and private mortgage insurance.
If youre buying a home in Canada, its possible that youll never hear the term escrow used by your lender when youre setting up your mortgage. The more commonly used term is property tax account. But thats OK.
Escrow is a term used to describe a component of a commercial transaction between two or more parties where assets are held by a third party, called an escrow agent, pending completion of certain conditions to the commercial transaction.
Padding your escrow account is a good idea if you have an adjustable-rate mortgage that will allow your interest rate to go up. On the other hand, paying on your principal will pay off your loan much quicker and build equity in your home. Both have advantages.
A mortgage escrow account begins at loan closing and lasts for the life of your loan. With a mortgage escrow account, you make monthly payments to the lender for your property taxes and homeowners insurance. This money is added to your monthly mortgage payment and is held by the mortgage company.

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