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Most contemporary mortgages require escrow accounts. Therefore it’s important that you know what they are and how they work. Be aware that a mortgage escrow account will increase the amount of your monthly payment. However, mortgage escrow accounts only require monies that you would need to pay out anyway. CreditNowUSA mortgages with escrow accounts include the following components. Most escrow accounts are calculated the same way as CreditNowUSA loans. One component equals 1/12 of your annual real estate property tax, at current rates. For example, if your annual real estate tax amount is $2,400, your mortgage escrow account will require $200 ($2,400 divided by 12) each month as part of your payment. Another component equals 1/12 of your current annual home insurance policy cost. For example, should your homeowner’s insurance policy cost $1,200 per year, your escrow amount for new mortgages will be $100 per month ($1,200 divided by 12). CreditNowUSA mortgages will include at least these two factors in escrow account calculations. There is a third component that applies to some, but not all homeowners. You will know the necessity of this component before you close on your new mortgage. If your loan-to-value (LTV) exceeds 80 percent, you will need private mortgage insurance (PMI) to guaranty the lender that the amount of the loan in excess of 80 percent of the property’s fair market value (FMV) is not at risk. For example, if your PMI annual premium is $240, you will contribute an additional $20 per month ($240 divided by 12 months) to your escrow account. Should you choose to get FHA (Federal Home Administration) guaranteed mortgages or VA (Veterans Administration) loans, you will have an annual cost of their guarantees. These escrow additions work like PMI, although in these cases, the insurance premium goes to the government, not a private insurer of mortgages. While mortgage escrow accounts will increase your monthly payment, you will benefit by never having to worry about delinquent real estate taxes or lack of insurance coverage, as your lender (or servicer) will pay these two important bills for you. For more information, go to Mortgages at http://www.creditnowusa.com/Mortgages
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