Mortgage/Loan druid questions

Derek Atkins warlord at MIT.EDU
Mon Apr 24 13:54:55 EDT 2006


Quoting Mike Alexander <mta at umich.edu>:

> --On April 24, 2006 9:34:59 AM -0400 Josh Sled 
> <jsled at asynchronous.org> wrote:
>
>>> Escrow ???
>>>         Guess this is which account you use to pay the loan from?
>>
>> Yes; it's an intermediate account you pay into, from which the loan is
>> actually paid.
>
> Are you sure about that?  I've never used the loan feature, but this 
> is not the usual use of this term with loans in the US.  Often for 
> mortgage loans a bank will require you to set up a separate escrow 
> account which you pay into and they use to pay the taxes and 
> insurance on the property being mortgaged.  This is separate from the 
> loan payments.  I would assume the escrow account would be the 
> account to hold these escrow payments and record disbursements for 
> taxes, insurance, etc.

I'm with Mike here.  The escrow account isn't the account from which the LOAN
is paid, but rather it's an account you pay into on each mortgage payment
and then the mortgagee (the bank) uses the funds in the escrow account to
pay your taxes and insurance.

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available



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