Your Escrow Account Questions Answered!

Congratulations! After touring multiple houses, you and your family have finally found your perfect home. It has everything you've ever wanted and is in the perfect Lake of the Ozarks location.  You've submitted an offer, the sellers accepted it, and you have agreed upon everything that will be included in the sale of the home. That's all there is to it... Right?

Not exactly.  Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the conditions are met in the purchase agreement. This is exactly where your trusted title company at the Lake of the Ozarks really gets going! Arrowhead Title will work tirelessly to ensure that your closing process proceeds as smoothly and efficiently as possible.  In order to ensure that both parties are protected during a transaction, typically an escrow fund is agreed upon to be held as collateral. This not only offers a safety net for the seller as a show of good faith from the buyer, but it also protects the buyer's interest in the purchase of the property as well. Now, we know that not everyone understands the need for escrow services. So, this week, we'll be giving an in-depth look at what escrow is and why it's an important part of the home buying process.

FAQs About Escrow Accounts:

What is an Escrow Account? 

Many homeowners put money into an escrow account each month, sometimes without even realizing they're doing it. A portion of your monthly mortgage payment is broken out into this separate account.  The money in this separate account is used to make property tax and insurance payments for you, the homeowner.   The money in the escrow account goes to pay these bills so that you do not have to save separately for these expenses that go hand-in-hand with home ownership.

Why am I Required to Have an Escrow Account?

An escrow account is usually required if the down payment on your home was less than 20%. Property taxes and insurance premiums are a few of the large expenses this account helps pay. You make one combined mortgage and escrow payment each month and your mortgage company will then deposit a portion into your escrow account. When your property tax and insurance bills are due, they are paid on your behalf.

What is an Acceptable Minimum Balance on an Escrow Account?

An escrow account needs to have enough money in it to pay for your property taxes and insurance, and sometimes these costs are higher than expected. To keep you prepared, your mortgage company requires that you always keep a minimum balance in the account. For most accounts, the minimum balance equals about two months of escrow payments. Some accounts have a smaller minimum balance. This additional amount in your account helps to cover increases in taxes and/or insurance that may occur.

What is an Escrow Analysis?

As required by law, once a year, your escrow account is reviewed.  This is done to make sure the escrow portion of your total monthly payment covers your property taxes and insurance premiums, while also maintaining the minimum balance your account must have. The process is called an escrow analysis and this statement includes the results of the review. It includes a history of the activity on your account this year and the expected activity for next year.

How is my Escrow Amount Determined?

Your mortgage company will estimate how much your taxes and insurance will cost over the next 12 months. This number is based this on your loan closing documents, taxing authority, and insurance company information. That number is divided by 12 months and then added to your monthly mortgage payment. An escrow account amount may be adjusted throughout the year, or after a yearly escrow analysis to help determine if your account keeps the minimum balance required throughout the year. At this point, your escrow amount may be adjusted as seen fit by your mortgage company.

Why Did my Monthly Escrow Payment Amount Increase?

There are a few reasons your payment amount may have increased. In addition to changes in property taxes and/or insurance premiums, tax reassessments and insurance carrier changes may attribute to a change in your escrow amount. Due date change and fewer deposits than expected can also cause the payment amount to rise.

Arrowhead Title’s Escrow Services:

When you place funds in escrow with Arrowhead Title, your funds are held in a secured, non-interest bearing trust Escrow Account until the transaction is completed. This ensures that your transaction is protected. During a real estate transaction, the escrow officer holds all the important documents and deposits while the buyer and seller work out the details. We make sure the closing goes smoothly and everyone gets paid what they’re owed. After the closing, we record the deed and title transfer that make the home officially yours.

Our Residential Real Estate Escrow Services include:

Assuming impartial fiduciary responsibility for documents and funds related to the real estate transaction, as directed by the buyer and seller.
Preparing escrow instructions and all documents related to the terms of the sale.
Ordering title and tax searches
Reviewing of all documents received in escrow and reviewing the lender’s conditions related to title and hazard insurance.
Presenting all documents to the buyer and seller for approval and requesting the balance of the buyer’s funds for purchase of the property.
Reviewing the proceeds from the lender and determining when the transaction will be ready to close.
Recording the deed, deed of trust and other documents required to complete the sale.
Preparing the final settlement statement, disbursing proceeds and paying off any existing obligations.
Closing escrow and delivery of any statements, funds, and documents to appropriate parties.
Residential Closing Services

Choose Arrowhead Title for Your Escrow Services

Residential closing at the Lake of the Ozarks is a complicated, multi-faceted process. Successful closings require a great deal of cooperation and coordination between several parties, including the buyers, sellers, lenders, realtors, and any relevant homeowner associations. As the most trusted title company at the Lake, Arrowhead Title will coordinate the communication between all relevant parties to ensure that your closing statement is an accurate representation of the sale.
We offer escrow services that provide cost-effective security to all parties in the real estate transaction. We provide all the services necessary to conduct your closing. We will coordinate with the realtor, lender, buyer and seller, builder, homeowner association, etc. to make sure that your closing statement is an accurate reflection of the sale. We also provide standard documents necessary for closing such as the Warranty Deed, Bill of Sale, and affidavits. Let us put our customized services and leading technology to work for you for your next real estate transaction. Contact us today to discuss escrow services at the Lake of the Ozarks!

The Lake of the Ozarks' Most Trusted Title Company
Where Accuracy Matters!

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750 Bagnell Dam Blvd Suite B
Lake Ozark, MO 65049


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