Home Buying Coarse
IN THIS LESSON
Overview
Your monthly mortgage payment often includes more than principal and interest. Most loans also collect money for taxes and insurance in an escrow account.
How It Works
Each month, 1/12 of your annual property taxes and insurance is added to your payment. (That is the total split into 12 payments )
The lender holds these funds in an escrow account.
When bills are due, the lender pays them on your behalf.
Once a year, your escrow account is reviewed (escrow analysis). If taxes/insurance change, your payment adjusts.
Tip: Don’t be surprised if your mortgage payment changes slightly each year. This is normal and tied directly to your taxes and insurance premiums.
-
Add a short summary or a list of helpful resources here.