Simple Real Estate Definitions : Tax And Insurance Escrow
As a homeowner, your fiscal responsibility extends beyond just making mortgage payments. You must also pay your home’s real estate taxes as they come due, as well as your homeowners insurance policy premiums.
Failure to pay real estate taxes can result in foreclosure. Failure to insure your home is a breach of your mortgage loan terms.
There are two methods by which you can pay your real estate tax and homeowners insurance bills.
The first method is to pay your taxes and insurance as the bills come due, usually semi-annually. Depending on your home’s tax bill size and the cost to insure your home, these payments can feel quite large — especially if you’ve failed to budget for them properly.
The second method of paying your taxes and insurance is to give your lender the right to pay them on your behalf, a (more…)