1. Know what “escrow” is, and who’s dealing with it for you.
You will hear the term “escrow” quite a bit during the home buying process. So, what is escrow?
Escrow (or “settlement service”) describes the process of a third party holding money or property in trust for another until certain conditions are met. An example is any amount given to your real estate agent to accompany your offer on a house. That money goes into an escrow account until you close. Likewise, the settlement agent holds your down payment and your lender’s loan proceeds in escrow until closing.
You also might keep money in escrow with your mortgage company for as long as you’re paying for your house, so the mortgage company can pay your homeowners insurance and real estate taxes for you.
So, then what does “closing” mean?
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