An escrow is an account that is used to record money for the purchase of real estate. It keeps track of all the fees, deposits, and other considerations associated with buying a house. An escrow also makes sure the closing process goes smoothly.
If applicable, the buyer’s home inspection report (with required inspections), homeowner association dues, transfer taxes, and burn permits are often paid through escrow. The amount of money held in escrow is usually determined by the purchase agreement or the attorney for title policy.
When buying your first home in Ohio, you may want to use escrow for the following reasons:
One reason you want to use escrow is to protect yourself from being financially responsible for the seller’s costs in the event of non-payment by the seller. If a seller fails to pay for their property taxes, insurance, or repairs, the service costs are usually paid from your escrow.
When you use an Ohio escrow agent, he will collect money from you and place it in a secure account that holds all of your transaction funds.
In case something goes wrong, there is enough money in the account to cover the difference. Escrow ensures that home warranties and insurance which you are paying for actually go into effect before closing. It also makes sure homeowners’ dues and other applicable fees get paid, so you don’t lose your house while waiting for them to be resolved.
Getting the Best Mortgage Rates
Using an Ohio escrow will usually help you get a lower interest rate on your mortgage loan. The lender can see that for the amount of money they are allowing you to borrow, you have planned and set enough money aside in an account to make sure everything gets paid when it is supposed to be paid, which shows responsibility, which lenders like to see.
You should shop around for the best mortgage rates via MoneyWise.com and compare them to what your Ohio escrow can get you. It is the best way to get the best mortgage deal you can get.
Knowledge of Laws and Rules Related to Closing
When you use an escrow service, someone present can answer questions about laws regarding closing dates and mortgage requirements, such as property title searches. The agent will also inform you of any new laws that become available as they relate to homebuying. Using an Ohio escrow agent will help you avoid costly errors, which can result if you don’t use one.
An Ohio escrow company is responsible for wiring, mailing, and delivering money to the appropriate parties. A good agent (or title company) will make the transaction process as smooth and worry-free as possible.
Once your closing date is set, they will go over all of the details with you, so there are no surprises. You will also want to pick an escrow company that is easy to reach and willing to answer questions as they come up.
Laws Regarding Escrow Requirements in Ohio
An Ohio escrow agent is required to obtain a license from the Department of Commerce. You can use a limited or general power of attorney for transactions between first-time buyers and sellers, but an Ohio escrow company cannot be associated with either party.
An Ohio notary public can make sure that all conditions outlined in an Ohio purchase agreement are met. An Ohio notary public can also act as an escrow agent for buyers and sellers, provided that the individual signing is physically present at the time of closing.
An Ohio escrow agent can be a valuable asset when buying or selling a home. When you use an Ohio escrow, the closing process will run as smoothly as possible. In most cases, your purchase agreement dictates what is included in your Ohio escrow and how much money needs to be held for it.