Escrow

What is an Escrow Account

An escrow account, sometimes called an impound account, is an account that New American Funding maintains on a loan to pay property taxes, hazard insurance premiums, and flood insurance premiums (if required) on behalf of the borrower for the home that secures the loan. An escrow account is typically set up at closing and ensures that these property-related expenses are paid on time.

Does an escrow account affect my payment?

New American Funding funds an escrow account by collecting a portion of the anticipated annual property taxes and/or insurance premiums through the monthly mortgage payment. Since amounts due for property taxes and insurance may vary year to year, the amounts that are collected through the monthly mortgage payment may change, which will cause the monthly mortgage payment itself to change. Borrowers are notified of such changes before the new payment amount becomes due.

Is an escrow account required?

New American Funding may require a loan to have an escrow account for various reasons, such as the investor that owns the loan requires an escrow account, the loan was made as part of a government program for which an escrow account is required, or Federal law requires an escrow account for the loan. If your loan requires an escrow account, you may not be able to cancel it. You can reference more information and forms for escrow accounts below.