Understanding Escrow Accounts and Prepaid Mortgage Interest
As part three of our series in understanding the buckets of cash involved in a home purchase transaction, we cover the escrow accounts and prepaid items involved in the purchase of a home. Setting aside multiple months of prorated insurance premiums and property taxes play into this equation.
Now, don’t let these $$$ intimidate you! Reason being…the seller on the home transaction has to bring prorated property tax credits towards your home purchase in Illinois. Thus, as the buyer on the home transaction, you will ALWAYS receive a credit at closing (barring any massive increase in insurance premiums or mortgage interest rates!).
What this means to the home buyer mortgage holder…you will always receive a CREDIT when you purchase.
Point being…by watching all three videos we have produced in understanding the buckets of cash involved in the transaction and working with a real estate professional that understands this process, a first time home buyer could purchase a home for as little as less than 1% of the home purchase price! Crazy, huh? This means that it will technically be LESS expensive to purchase your first home rather than continue to rent a home.
Here’s some other benefits to purchasing a home rather than renting :
- Tax Benefits
- Appreciation of Property Value
- Freedom to Make Property Your Own!
- Mortgage Payments let you build EQUITY in your home while building WEALTH
- Equity in your home becomes SAVINGS in your pocket.
- Staying in your home for years let’s you build relationships within your community.
Interested in learning more in how we can assist you in your next home purchase? Start your search today by clicking here!