Handling Escrow on Your Loans – 3 of 3
Special Situations Check out part 1 – The Rules for Lenders and part 2 – How to do Escrow in Moneylender Now that we know how to determine the periodic escrow amount and what the allowed amounts are, let’s talk about some situations that commonly come up over the life of a loan in the real world. Pre-Funding the Escrow Account on a New Loan Loans are originated at all times of the year, and property taxes and insurance premiums can be due at various times of the year, too. Sometimes the loan is opened and the property taxes are due almost immediately. When this happens, it is common and appropriate to require a deposit to the escrow account as part of the loan closing. Although a lawyer or escrow company will usually figure out the numbers, you can easily determine a reasonable deposit amount yourself. Taking the amount to be paid in the future as the “expense”, the deposit amount is the expense minus 1/12 th of the expense for each month from when the loan