One of the mortgage terms that you are likely to encounter is “escrow.” This is a common part of mortgage loan financing, since it allows a homebuyer to start putting money toward expenses related to homebuying before the mortgage loan is closed.

Basically, escrow is when money and/or documents are held by a third party that is neutral. This means that rather than turning money over to the seller, you give it to a third party, such as an escrow service or the lender, in order to ensure that it is safe. This account assures the seller that you are paying, and it gives you peace of mind knowing that the seller won’t take off with your deposit before the sale is complete.

RealEstateABC.com offers an in-depth look at escrow.

Tags: mortgage loan, personal finance, financial planning, finances,
financial goals, mortgage loan financing, escrow, mortgage terms