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      • id22
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      • autor_nameLightspeed Escrow
      • titleIs California a Community Property State?
      • body<script type="application/ld+json"> { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://lightspeedescrow.com/blog-post/is-california-a-community-property-state" }, "headline": "Is California a Community Property State?", "description": "Community property states are states where community property law rules. Is California a community property state, and how does this law work? Discover here.", "image": "https://lightspeedescrow.com/files/blog/3189c4f8-fa8a-45f2-a9fe-d6b3fe650de8_street-with-palm-trees-in-california.jpg", "author": { "@type": "Organization", "name": "Lightspeed Escrow", "url": "https://lightspeedescrow.com/" }, "publisher": { "@type": "Organization", "name": "Lightspeed Escrow", "logo": { "@type": "ImageObject", "url": "https://lightspeedescrow.com/theme/Public/images/logo-dark.svg" } }, "datePublished": "2022-09-20", "dateModified": "2022-09-20" } </script> <p>Community property, also known as marital property, spousal assets, and marital assets, is vital when it comes to divorce, estate law, and taxes. It encompasses all assets you obtained during the marriage.</p> <p>Community property states are states where community property law rules. Here, couples must split equally all assets acquired during their marriage, including real estate.</p> <p>So, <strong>is California a community property state</strong>? Find out in this article.</p> <h2>What Is a Community Property State?</h2> <p>Divorce is one of the modern world’s most draining experiences. However, in the US, nine states have tried to facilitate this process by passing community property laws. In community property states, <strong>couples must divide equally all assets obtained during their marriage</strong>. The goal is to reduce the quarrels over who gets how much of what by having the law dictate the split.</p> <p>The nine states are:</p> <ul> <li>Arizona</li> <li>California</li> <li>Idaho</li> <li>Louisiana</li> <li>Nevada</li> <li>New Mexico</li> <li>Texas</li> <li>Washington</li> <li>Wisconsin</li> </ul> <p>While, in some states, divorce laws are leaning toward the community property concept, the nine states mentioned above are the only true community property states as of June 2021. Alaska, South Dakota, and Tennessee have an “opt-in” community property law that enables such a division of property if both individuals agree.</p> <h2>What Is Community Property?</h2> <p>Also known as marital property, community property is <strong>a US state-level distinction that identifies a married individual’s assets</strong>. And real or personal property and any income obtained by either spouse during a marriage are considered community property. Therefore, they belong to both partners, meaning both spouses own and owe everything equally, regardless of who earns or spends the income.</p> <h2>Understanding Community Property</h2> <p>In community property jurisdictions, each spouse owns a share of the marital assets, including real estate and other financial assets acquired during the marriage. In some jurisdictions, such as California, community property is split strictly in half, with each spouse getting 50% of any assets considered marital property.</p> <p>However, in other jurisdictions, such as Texas, a judge may decide to split assets in any denomination they deem fair to both spouses.</p> <p>Typically, inherited assets and gifts to one spouse aren’t considered marital property, whereas debts acquired during the marriage are usually considered community property.</p> <p>Existing to protect spousal rights, the concept of community property originated in Spanish law, a system of civil law derived from Roman civil law and the <u><a href="https://www.britannica.com/topic/Visigoth">Visigothic Code</a></u>. It acknowledges that both spouses contribute to marriage differently and considers them financially equal under the law.</p> <p>For instance, community property considers the contribution of a “breadwinning” spouse and a homemaking spouse as equals by <strong>granting both spouses a share of marital property</strong>. This is true even if the homemaking spouse may not have brought financial or other assets into the marriage.</p> <h2>So, Is California a Community Property State?</h2> <p><strong>California is a community property state</strong>. And according to the California Family Code section 760, community property is defined as all property, personal or real, wherever situated, obtained by a married individual during the marriage while domiciled in the state. Once officially divorced, community property is typically divided 50/50 between the ex-spouses.</p> <h3>Exceptions to Community Property in California</h3> <p>There are several exceptions to community property in California. Under specific circumstances, the law will regard property as separate property of just one spouse:</p> <ul> <li>The property was given to one spouse as a gift.</li> <li>One spouse received the property through someone’s will or a trust fund.</li> <li>One spouse received it as an inheritance.</li> <li>A spouse acquired it before marriage.</li> <li>The property was acquired by one spouse or just that spouse's money.</li> <li>It was obtained when the couple was living apart or separated. Typically, spouses are regarded by the law as living apart when one of them informs the other that they don’t want the marriage to continue. They also must physically reside in separate locations.</li> </ul> <h2>What Is Property Under California Law?</h2> <p>Under California law, property is <strong>anything you can sell or buy</strong>, including real estate, furniture, vehicles, clothing, and household goods. Also, it’s <strong>anything that holds value</strong>, even if you can’t sell or buy it, such as cash, bank accounts, stocks, pension plans, businesses, patents, life insurance with cash value, etc.</p> <p>When you divorce your spouse, you can come up with an agreement that gives you and your spouse a fair share of the property. However, the judge will still have to sign off on it, even if you agree. And if the settlement is unfair to one of you, the judge is free to tell you to come back with another plan. On the other hand, if you and your spouse don’t agree, you’ll have to ask the judge to rule or go to mediation.</p> <h2>What Is the Difference Between Community Property vs. the Common Law Stat</h2> <p>Most states rely on the concept of common law property to decide who owns property obtained during a marriage. Common law property is considered <strong>the property of the spouse who obtains it during the marriage</strong> unless it’s placed under the names of both spouses.</p> <p>So, how is property divided in a common law property state in case of a divorce? The guiding principle is equitable distribution. Here, the idea is that property ownership is unequal due to factors such as spouses’ education, employability, earrings level, financial needs, health, and age.</p> <p>Considering these factors should make the distribution fair, but not necessarily equal. For example, in some cases, judges may demand one spouse to use their separate property to make a settlement fair to both individuals.</p> <p>Divorcing spouses will often work out how they wish to split their assets and debts themselves or with the help of a neutral party. However, if they can’t agree, the court decides on the division of property based on the laws of the state.</p> <h2>What Is Separate Property?</h2> <p>Separate property is <strong>the property that one spouse owned before the marriage</strong>. It also covers inheritance and gifts given to one spouse and property bought or earned after the separation. This is the main reason why the date of separation is vital in many divorces and should be recorded and discussed with your lawyer as soon as possible.</p> <p>Moreover, any property purchased with separate property is separate property, despite being bought during the marriage. In addition, income or rent earned from separate property is also separate, meaning rent or money made from businesses or real estate owned before marriage will still be separate property unless mixed with community assets.</p> <h2>How Does Separate Property Become Marital Property?</h2> <p>The trickiest part of marital vs. separate assets is that most married couples behave as a single household. They spend money from the same bank accounts, share significant assets, and hold property in common. This leads to what the law considers “commingling”.</p> <p>Commingling happens when separate assets are used by both spouses or when married couples share separate assets, causing these assets to be reclassified as marital assets.</p> <h2>Protect Yourself During a Divorce</h2> <p>Each spouse should open separate bank and savings accounts once the split happens. However, an <a href="https://lightspeedescrow.com/blog-post/how-to-open-escrow-account">escrow account</a> may be needed to ensure adequate support for shared children or a disadvantaged spouse. An escrow account can also prevent unnecessary or excessive depletion of joint marital funds.</p> <p>If you need escrow services, work with a good agency, such as Lightspeed Escrow. We are a team of experts who know how the get the job done expediently and avoid common pitfalls. So, <a href="https://lightspeedescrow.com/contact-us">contact Lightspeed Escrow</a> for quick and accurate escrow services.</p>
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      • autor_nameLightspeed Escrow
      • titleA Homeowner’s Comprehensive Guide to Escrow Insurance
      • body<script type="application/ld+json"> { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://lightspeedescrow.com/blog-post/escrow-insurance" }, "headline": "A Homeowner’s Comprehensive Guide to Escrow Insurance", "description": "More than 260,000 escrows are closed every month in the US. But, do you know what escrow insurance is and how it relates to your homeowners insurance?", "image": "https://lightspeedescrow.com/files/blog/6c52b676-30cf-4b27-b9a8-f4c4d78557b4_man-reading-insurance-documents.jpg", "author": { "@type": "Organization", "name": "Lightspeed Escrow", "url": "https://lightspeedescrow.com/" }, "publisher": { "@type": "Organization", "name": "Lightspeed Escrow", "logo": { "@type": "ImageObject", "url": "https://lightspeedescrow.com/theme/Public/images/logo.svg" } }, "datePublished": "2022-06-29", "dateModified": "2022-06-29" } </script> <p>Buying a property for the first time can be very exciting but sometimes also overwhelming. It's probably the most significant investment of your lifetime, and there's quite a lot to keep up with along the way. Each step of the real estate transaction process might be unfamiliar, from obtaining financing to making an offer and closing the deal.</p> <p>Another thing that might be new to you is the concept of escrow insurance. If you're taking out a mortgage, your lender will probably require you to have one to make sure you have enough money to cover the related expenses, including your homeowners insurance. It’s an unavoidable expense for most homeowners, but taking care of it with an escrow account can make things a little easier.</p> <p>Read on to learn the ins and outs of escrow insurance accounts as we break down how they work when it comes to paying your homeowners insurance premiums.</p> <h2>What Is Escrow Insurance?</h2> <p><strong><a href="https://lightspeedescrow.com/blog-post/how-to-open-escrow-account">Opening an escrow account</a> makes it easy to manage property taxes and insurance premiums for your home</strong>. It’s a very convenient and safe way of paying all bills when they’re due, as you don’t have to save for them separately or pay annual lump-sum expenses all at once because through escrow, you make monthly payments, where:</p> <ol> <li>Part goes toward your mortgage to pay your principal and interest.</li> <li>The other part goes into your escrow account for property taxes and insurance premiums (like homeowners insurance, mortgage insurance, or flood insurance).</li> </ol> <p>When your taxes and homeowners insurance fall due, your mortgage lender uses the funds in your escrow account to pay those bills on your behalf. As you make these monthly payments, the loan servicer will set aside a portion of your mortgage payment and hold it in your account to cover taxes and insurance payments associated with the property. For example, your homeowners insurance will be paid out of the escrow account.</p> <h3>Does Escrow Include Home Insurance?</h3> <p>Does escrow pay home insurance? In short, yes. Your escrow account is specifically designed to pay for your homeowners insurance premium each month, as well as property taxes. Keep in mind that your escrow funds won’t be used to cover expenses related to homeownership, like your utility bills or HOA fees.</p> <h2>What Is Escrow Home Insurance?</h2> <p><strong>Homeowners insurance, also called home insurance, is a type of property insurance that covers your home, its contents, and more</strong>. Homeowners insurance policies generally cover destruction and damage to a residence's interior and exterior, the loss or theft of personal belongings, and injury that arises while on the property. You pay an annual premium for the coverage, and the insurance company pays for any covered losses up to your insurance policy’s limits.</p> <p>Home insurance isn't a luxury. It's more of a necessity, and not just because it protects your property against destructive events. Most mortgage companies require borrowers to have insurance coverage for their property and won't make a loan or finance a residential real estate transaction without proof of insurance. Using an escrow home insurance account for your homeowners insurance payments provides protection to both you and your lender.</p> <h3>How Does Homeowners Insurance Escrow Work?</h3> <p>A homeowners insurance escrow account is a separate bank account designed to house money set aside each month to pay for several essential mortgage items, including homeowners insurance. Paying home insurance through an escrow account is very convenient as your policy premium is essentially rolled into one account. It also guarantees you'll have enough money to cover lump sum property taxes and homeowners insurance payments when they’re due.</p> <p>Paying your homeowners premium and property taxes through an escrow account isn’t required for all home loans but is common. Many homeowners home insurance payments are part of their monthly mortgage payment and are typically kept in an escrow account. The benefits of an escrow account are many, but it comes down to whether you like to be more hands-off when it comes to your monthly payments and value agency over your account.</p> <p>It’s also worth noting that an escrow account has no impact on your insurance premiums, so it doesn't make home insurance cheaper or more expensive. However, homeowners premiums and annual property taxes can fluctuate. When such changes occur, the mortgage servicing company will simply adjust the amount you must pay to the escrow account.</p> <h3>Benefits of Having an Escrow Insurance Account</h3> <p>Whether or not you should get homeowners insurance escrow is up to you and your mortgage lender. Ultimately, you’ll need to decide if you prefer making the monthly payments yourself or if you want to have that process automated. Understanding the pros and cons of paying homeowners insurance with an escrow account will help you make the best decision for your needs.</p> <ol> <li><strong>Automatic payments</strong>: You may like the convenience and peace of mind that an escrow account allows you to take care of payments with virtually no effort on your part. Instead, the mortgage servicer sends your payment to your insurer for you. You don't have to worry about paying various home-related taxes and insurance bills on time, which allows you to avoid late penalty fees.</li> <li><strong>Incentives</strong>: Some mortgage lenders incentivize escrow accounts to make them more attractive to homeowners, so you may save more on your interest rate or closing cost.</li> <li><strong>Potential to earn interest</strong>: You may even be able to make interest from an escrow account, but this varies by state and lender.</li> <li><strong>Always in the loop</strong>: With escrow insurance, there are no surprises with large annual premium payments. Your lender will also typically notify you of any changes to your payments and report your account balance, including overages and shortages.</li> </ol> <p>The cons of homeowners insurance escrow? You will probably have to make a larger upfront payment since you are generally required to prepay homeowners insurance, and you could miss out on short-term investment opportunities by not saving the money in your own account. Nonetheless, as mentioned above, some states allow you to earn interest even from the escrow account.</p> <h2>FAQ</h2> <h3>Is Homeowners Insurance Included In Mortgage?</h3> <p>Your homeowners insurance premium is included in your mortgage payment if you have an escrow account. When you pay your mortgage through escrow insurance, a portion of the overall payment is set aside in your escrow account to pay for your homeowners insurance and property taxes (and mortgage insurance if your lender requires it). This way, all insurance and property taxes are automatically paid from the escrow account when they're due.</p> <h3>Can I Pay My Homeowners Insurance Myself?</h3> <p>Homeowners insurance can be paid through an escrow account or directly by you to your insurance company. Whether or not you can pay your home insurance yourself depends on how your mortgage is set up.</p> <p>Some may have the option to pay their property taxes and homeowners insurance themselves. However, most mortgage servicers require an escrow account for borrowers whose down payment is less than 20 percent. If your home is paid off, you will not have an escrow account, and you’ll pay your premium to the insurance company directly.</p> <p>With an escrow account, your homeowners insurance will be paid yearly. If you don't have an escrow account, you can typically choose to pay for your home insurance monthly, quarterly, semiannually, or yearly.</p> <h3>How to Change Home Insurance with Escrow?</h3> <p>Modern home insurance is very customizable, and many carriers are offering extensive coverage and incentives for signing up, such as discounts on your premium. You do not have to wait until your renewal date to change your homeoweners insurance escrow to a new carrier - you can change companies in the middle of your policy term.</p> <p>Paying your home insurance through escrow can be convenient, but if you want to change insurance providers, things can get a little tricky. So, how do you change homeowners insurance with an escrow account? Here’s what you need to do:</p> <ol> <li>Shop for and choose a new carrier</li> <li>Buy your new policy</li> <li>Notify your mortgage company</li> <li>Cancel your current policy</li> <li>Check with your mortgage lender for any payment changes</li> <li>Send any premium refunds to your new escrow account</li> </ol> <p>Changing home insurance through escrow doesn’t cost anything because all your lender has to do is update where they send your funds. If you paid the full coverage amount upfront but end up canceling your policy before the end date, you’ll receive a refund check for that allotted time. However, you could face a small fee for canceling your previous policy before it ends.</p> <h3>How to Lower Escrow Payment?</h3> <p>There are a few ways you can lower your escrow payments. You can dispute your property taxes if you think your property tax bill is too high, shop around for cheaper homeowners insurance premiums, or request a cancellation of your private mortgage insurance. You can also ask your lender to reevaluate your monthly escrow payment if you have evidence that shows you’re currently overpaying into escrow.</p> <h2>Reliable Escrow Insurance Services at the Speed of Light</h2> <p>Escrow is a vital part of real estate, especially when purchasing a home. Having an escrow insurance account can give you peace of mind by helping you budget the tiresome annual costs of being a homeowner. Trust and experience are essential in choosing an escrow company as escrow accounts are often a target for scams because of the large funds held in one place. Reputation for speed of transaction and competitive fees is also important.</p> <p>Yes, real estate deals can be complicated, but we make them simple. Light Speed is a full-service escrow committed to making transactions quick, seamless, and affordable throughout Southern California, whether you are a first-time or seasoned home buyer.</p> <p><a href="https://lightspeedescrow.com/contact-us">Get in touch</a> for reliable, expert, and fast escrow services today!</p>
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      • id6
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      • autor_nameLightspeed Escrow
      • titleThe Ultimate Guide to an Escrow Refund
      • body<script type="application/ld+json"> { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://lightspeedescrow.com/blog-post/escrow-refund" }, "headline": "The Ultimate Guide to an Escrow Refund", "description": "Don’t let a potential escrow refund slip through your fingers - learn all about how it works and how to keep an eye on your account to qualify for one.", "image": "https://lightspeedescrow.com/files/blog/bd6fe8a1-2d93-40dd-8705-8df42f07448f_housing-market-concept-house-key-loan-escrow.jpg", "author": { "@type": "Organization", "name": "Lightspeed Escrow", "url": "https://lightspeedescrow.com" }, "publisher": { "@type": "Organization", "name": "Lightspeed Escrow", "logo": { "@type": "ImageObject", "url": "https://lightspeedescrow.com/img/logo.png" } }, "datePublished": "2022-06-27", "dateModified": "2022-06-27" } </script> <p>Escrow accounts are used to hold funds for paying pop-up expenses like property taxes and insurance premiums when they’re due. It’s a helpful way to have these expenses covered by a third party and paid on time, so you don’t have to juggle them with your other bills. When mortgage companies perform their annual escrow account analysis, they may stumble upon an overage or shortage of funds on your escrow account.</p> <p>The phrase “ignorance is bliss” is a poor mantra to live by and certainly no way to act towards your finances. A surplus of funds on your escrow account can actually present an enticing opportunity to get a lucrative escrow refund. Knowing the ins and outs of escrow refunds will allow you to get your money back in certain situations.</p> <p><strong>To keep you in the loop, we’ll go over what an escrow refund is, how it works, as well as when you may qualify for and receive one</strong>. Ready to cash in some unexpected funds?</p> <h2>What Is an Escrow Account?</h2> <p>If you’ve never made a mortgage payment before, you might not be familiar with escrow accounts in the first place. So, let’s start with the basics. An escrow account is essentially a savings account that’s managed by mortgage servicers to make monthly payments for estimated <a href="https://lightspeedescrow.com/blog-post/when-are-property-taxes-due-in-california">property taxes</a> and your homeowner's mortgage insurance premiums on your behalf. Your escrow balance is the amount of money that is held for you in your escrow account.</p> <p>Each month, a portion of your mortgage payment will go into your escrow account, and your mortgage servicer will use that money to pay your taxes, mortgage, and homeowners insurance bills when they are due. Even if an escrow account isn’t necessary, it’s still a good idea to use one as all the payments and budgeting will be managed for you, and you’ll be able to spread out your taxes and insurance payments over the year instead of paying a large sum all at once.</p> <h2>What Is an Escrow Refund?</h2> <p>Since the money in the escrow accounts is for future payments, things can change. For various reasons, which we will later explain in more detail, sometimes you may end up with some extra money in your escrow account than you need to pay your bills. Escrow accounts are governed by the Real Estate Settlement Procedures Act (RESPA), and RESPA has a limitation on the amount of money that can be kept in an escrow account.</p> <p>If your escrow contains excess funds, this means you have an overage. Lenders are required to refund you if your escrow account balance is over the limit. <strong>An escrow refund allows you to reclaim the excess funds stored on your behalf by a mortgage servicer</strong>.</p> <p>If an escrow account analysis shows that the escrow account has an overage, you’re eligible for an escrow refund and will receive an escrow overage refund check with the remaining balance. You could get an escrow refund if its balance becomes higher than necessary or once you've completely paid off your mortgage.</p> <h3>What Is an Escrow Balance Refund?</h3> <p>Any time an existing escrow account is closed and there are remaining funds in it, you are eligible to receive an escrow balance refund for the remaining balance on the account. If your mortgage is fully paid off, you should receive a check in the amount of any remaining balances from your lender within 20-30 business days.</p> <h3>What Is a Refinance Escrow Refund?</h3> <p>Wondering what happens to your escrow balance when you refinance? Mortgage refinance means that loan servicing may be transferred from one loan servicer to another. Suppose you’re refinancing your mortgage with your original mortgage lender. In that case, your existing escrow account funds will generally remain intact, so there will be no overages that call for an escrow refund unless the property tax bills or insurance premiums have changed.</p> <p>However, if you refinanced your mortgage with a different lender, a new escrow account will be opened and your previous one closed. <strong>In this case, you’ll receive a refund check with the balance surplus in your original escrow account</strong>.</p> <h3>What Is an Escrow Deposit Refund?</h3> <p>An <a href="https://lightspeedescrow.com/blog-post/earnest-money">earnest money</a> escrow deposit is also refundable. In most U.S. jurisdictions, the earnest money deposit held in escrow during the contract period must be returned if a buyer properly walks away from a deal. <strong>This means you can get an escrow deposit refund if you are backing out of the purchasing agreement before specific deadlines and didn’t break any contract rules</strong>.</p> <h3>What Is Net Escrow?</h3> <p>When you refinance a mortgage, it’s like starting over with a new loan. Instead of paying the new escrow amount out of your pocket, you can ask the old lender to “net escrow.” This means rather than the lender sending the funds back to you, they send them to your new lender. You can use these funds to cover the difference for the new escrow account.</p> <h2><a href="https://lightspeedescrow.com/blog-post/mortgage-escrow-account-pros-and-cons">Mortgage Escrow</a> Refund Rules</h2> <p>You have an “escrow surplus” or “escrow overage” if the quantity of excess money in your escrow account exceeds the permissible cushion. The federal government allows banks to cushion their customers’ escrow accounts by up to one-sixth the estimated amount. This helps to assure the bank that it will not have to use its funds to pay the bills. It also increases the likelihood of an escrow overage.</p> <p><strong>Account overages must be handled according to specific RESPA rules and laws, including amounts to be returned to account holders</strong>. Lenders are subject to penalties if they mishandle escrow funds.</p> <p>Let’s go over some of the most important ones:</p> <ol> <li>The excess amount on the escrow account must be more than $50 to be able to request an escrow refund</li> <li>If the overage in your escrow balance is less than $50, the mortgage lender can keep the amount in the account to service future bills</li> <li>There are no rules or limits regarding the maximum amount of money you can receive through an escrow refund, as the surplus money is rightfully yours.</li> </ol> <h3>When Are You Eligible for an Escrow Refund?</h3> <p>As mentioned above, escrow funds are limited in the amount of your money they can hold. <strong>If your escrow account has excess funds (more than two months’ worth of future payments), you are eligible to ask for that money back if the excess amount is more than $50</strong>. Escrow refunds can occur for several reasons, the most common ones being:</p> <ol> <li>You’ve entirely paid off your mortgage</li> <li>You’ve paid more into your escrow than necessary</li> <li>You’re closing or refinancing your escrow account</li> <li>You’re switching up insurance companies for a better rate</li> <li>Property tax bills are lowered</li> </ol> <p>However, keep in mind that you must be current on your payments to be eligible for a refund. Otherwise, your mortgage servicer can be allowed to keep the surplus to use for paying future bills.</p> <h2>What Is an Escrow Refund Check?</h2> <p>An escrow refund check, also known as an <a href="https://lightspeedescrow.com/blog-post/escrow-surplus">escrow surplus</a> check, is the check you will receive for your escrow refund to be able to cash in the excess funds in your escrow account.</p> <h3>When Will I Get My Escrow Refund Check?</h3> <p>If you are eligible for an escrow refund, you’ll likely receive the check once your lender has completed their annual escrow account analysis. This typically happens around the time the loan originated. RESPA requires the lender to return the funds to you within 30 days after the <a href="https://lightspeedescrow.com/blog-post/guide-through-an-escrow-analysis">escrow analysis</a> and identifying the overage.</p> <p>However, it’s possible that you may need to ask to receive the escrow refund check. You can request a refund at any time of year if you’re eligible.</p> <h3>When Will I Get My Escrow Refund After Refinancing?</h3> <p>The exact turnaround time of a refund check is not always certain. You should receive your escrow refund within 30 days of your former lender receiving the mortgage payment from your new lender. Still, lenders vary in their refund processing times, and if your former lender doesn't refund your check within a month of closing, you may have to follow up or contact the lender to speed up the process.</p> <h3>What Should I Do With My Escrow Refund Check?</h3> <p>So, it turned out you had surplus funds in your escrow account at the end of the year and received an escrow refund check from your mortgage lender. Now, you’re wondering what you should do with these funds.</p> <p>The good news is there's no universal "best" way to spend this surprise money. It all depends on your financial situation and your personal preferences. After all, the money is yours to do as you please, and there are tons of ways you can utilize your escrow refund!</p> <h2>How to Calculate Escrow Refund / Overage</h2> <p>Calculating your escrow refund, that is, the overage you have in your escrow account, is not as complex as it might seem. Simply multiply your monthly mortgage payment by three to account for next month's payment plus the two-month cushion. The amount you get is the maximum amount the mortgage servicing company can keep in your escrow account under RESPA.</p> <p>After that, compare this number against the actual balance in your escrow account. If there is a surplus of over $50, congratulations – you’re eligible for an escrow refund in that amount!</p> <p>Another way to calculate potential escrow overage is to know the current balance in your escrow account. Add the 12 monthly escrow payments that you will be making during the upcoming year. Then, simply deduct the estimated disbursements for property taxes and insurance bills. If there is money left, then you’ll have an escrow overage.</p> <h2>The Bottom Line</h2> <p>Setting up an escrow account is a form of “trust” - it offers a convenient way to pay for taxes and insurance so that the transactions can run seamlessly. Sometimes, they can even surprise you with the opportunity to get some extra money back.</p> <p>With Lightspeed Escrow, you can expect fast, low-cost and transparent transactions on any real estate escrow service you need throughout Southern California. We pride ourselves on error-free transactions and complete transparency from the start. <a href="https://lightspeedescrow.com/contact-us">Get in touch</a> for reliable escrow services to keep your escrow account in good hands and have someone to keep a close eye on your escrow balance and potential escrow refund.</p>
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      • short_descriptionDon’t let a potential escrow refund slip through your fingers - learn all about how it works and how to keep an eye on your account to qualify for one.
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      • titleThe Role of an Escrow Officer in Real Estate Transactions Explained
      • body<script type="application/ld+json"> { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://lightspeedescrow.com/blog-post/the-role-of-an-escrow-officer-in-real-estate" }, "headline": "The Role of an Escrow Officer in Real Estate Transactions Explained", "description": "What is escrow and what does an escrow officer do, exactly? Learn all about the duties, responsibilities, and role of an escrow officer in real estate transactions.", "image": "https://lightspeedescrow.com/files/blog/365b5fef-c0b6-440d-9a9c-d4fe0be81377_escrow-officer.jpg", "author": { "@type": "Organization", "name": "Lightspeed Escrow", "url": "https://lightspeedescrow.com/" }, "publisher": { "@type": "Organization", "name": "Lightspeed Escrow", "logo": { "@type": "ImageObject", "url": "https://lightspeedescrow.com/img/logo.png" } }, "datePublished": "2022-06-08", "dateModified": "2022-06-15" } </script> <p>Escrow is a commonly used service when buying or selling property. It opens after a signed agreement is delivered to an escrow officer, who ensures that all the conditions of the contract are met. <strong>Being familiar with the concept of escrow services can help you minimize your risk when valuable real estate exchanges hands and move forward with the deal more comfortably</strong>.</p> <p>If you’re planning on dealing with a real estate transaction – selling or buying property, it’s worth learning how escrow works, what is the role of an escrow officer in real estate transactions and how they can help make the entire process run seamlessly.</p> <h2>What Is Escrow?</h2> <p>Escrow might seem complex, especially to first-time homebuyers or home sellers. So, before we get into detail, let’s start from the basics to put things into perspective. Simply put, escrow is a legal arrangement in which a third party temporarily holds assets (usually money or property) until a particular condition has been met (such as the fulfillment of a purchase agreement).</p> <p>Escrow is commonly used for any number of financial and legal scenarios of large value, such as the purchase of a home or other property. It’s used in real estate transactions to protect both the buyer and the seller throughout the home buying process.</p> <p></p> <h3>How Does Escrow Work In Real Estate?</h3> <p>The use of an escrow account in a transaction adds a degree of safety for both parties as assets at stake are safely kept in a third-party account and released only when all terms of the agreement have been met. That third party, broadly known as an "escrow provider," helps make the transaction safe by protecting the assets until both parties have met their obligations of the agreement.</p> <p>Escrow accounts may be handled by a variety of third parties, including an escrow company, or an escrow officer/agent. The escrow process is fairly simple. The buyer of the property transfers funds to an escrow provider. If all the requirements and terms of the transaction are met, then the funds are further transferred to the seller of the property. If not, then either partial funds are transferred to the seller, or they are all returned to the buyer.</p> <p></p> <h3>Why Use an Escrow?</h3> <p>Escrow is commonly used in many different kinds of purchases because it safeguards both the buyer and the seller. In the world of real estate, escrow is mainly used for two reasons:</p> <ol> <li>To protect the buyer’s good faith deposit so the money goes to the right party according to the conditions of the transaction</li> <li>To hold a homeowner’s funds for <a href="https://lightspeedescrow.com/blog-post/when-are-property-taxes-due-in-california">property taxes</a> and homeowners insurance.</li> </ol> <p>When large financial investments are at stake, like in real estate, escrow allows both parties to make sure there aren’t any malicious attempts at stake. The main purpose of an escrow is to ensure everybody sticks to their end of the bargain. It asserts that the transfer of funds and/or assets only happens when all the obligations of the transaction have been met. <a href="https://lightspeedescrow.com/services">Escrow services</a> are also beneficial when a transaction needs to be completed in steps.</p> <p>Without escrow, both buyers and sellers are taking a significant risk. For example, there’s nothing stopping a seller from cashing the check without the buyer knowing whether or not all concerns regarding the transaction have been properly addressed.</p> <p></p> <h2>What Is An Escrow Officer?</h2> <p>In arrangements where valuable assets are at stake, one party may feel unsure that the other will meet their end of the bargain, creating the need for a third party to act as a "referee." That’s where an escrow officer comes in. Lenders and real estate agents often have business relationships with title companies and choose an escrow officer on your behalf.</p> <p>An escrow officer, or an escrow agent, is a neutral, unbiased third party who isn't concerned with whether the buyer or seller comes out ahead – his or her only job is to successfully accomplish the closing of a real estate transaction. Escrow officers are professionals specialized in the complexities of closing a real estate transaction, whether by receiving official formalized training or simply by mastering the craft in practice.</p> <p></p> <h3>Who Does An Escrow Agent Work for?</h3> <p>Escrow agents may work for a <a href="https://lightspeedescrow.com/blog-post/is-title-insurance-a-waste-of-money">title insurance</a> company, real estate attorneys, as an affiliate of a lender, or as an independent escrow company. However, they do not work for the buyer or seller and must remain neutral in any transaction.</p> <p></p> <h3>What Is An Escrow Assistant?</h3> <p>An escrow assistant often helps with basic clerical and administrative tasks during a real estate transaction. They may help with opening an escrow account, emailing all involved parties with status updates, and help schedule meetings and closings.</p> <p></p> <h2>What Is The Role of An Escrow Officer In Real Estate Transactions?</h2> <p>An escrow officer is an extremely important role in real estate. Simply put, the role of an escrow officer in real estate transactions is to safeguard the assets of buyers and sellers before they get transferred from one party to the other. They help make sure that the real estate transaction goes smoothly and act as an impartial third party to securely hold on to funds from purchasers.</p> <p>More specifically, an escrow officer's role is to:</p> <ol> <li>Secure funding</li> <li>Review documents</li> <li>Oversee the transactional process</li> <li>Disburse the money accordingly once all the required conditions are fulfilled.</li> </ol> <p>An escrow agent is there to ensure a real estate transaction is correctly carried out by a homebuyer, home seller, and any real estate agents involved in the purchase or refinance of a home. The escrow officer acts as a “middleman”, ensuring that both the buyer and seller will do what they agreed to do before closing the deal. Escrow officers oversee the terms of a contract throughout the transaction and make sure that they are honored by all parties.</p> <p></p> <h3>Escrow Officer Job Description: What Does An Escrow Officer Do?</h3> <p>The duties of an escrow officer are usually defined by the particular transactional agreement they are overseeing, as terms can vary. However, some of the typical responsibilities and tasks of an escrow officer include:</p> <ol> <li>Meeting with clients to explain the escrow process, answer questions, and offer escrow instructions</li> <li>Depositing and handling escrow funds</li> <li>Overseeing the escrow account</li> <li>Handling title and property-related documents</li> <li>Notifying all parties if there are any potential problems</li> <li>Making sure all sales and legal documents are in compliance</li> <li>Ensuring loan and contract paperwork is signed timely and correctly</li> <li>Prorating taxes, interest, insurance, and rests</li> <li>Providing all parties with an escrow balance statement</li> <li>Paying bills as authorized</li> <li>Keeping all parties involved informed about closing timelines</li> <li>Overseeing the work of an escrow assistant (if involved)</li> <li>Serving as a central point of communication between all parties involved (the buyer and seller, title company, real estate agents, business managers, attornies, and mortgage broker)</li> <li>Approving the disbursement of escrow funds during closing and submitting documents for recording after all terms have been met.</li> </ol> <p>However, keep in mind that negotiating transactions and offering any legal or investment advice is not in an escrow officer’s job description.</p> <h2>Escrow Officer Salary: How Do Escrow Officers Get Paid?</h2> <p>Escrow agents usually earn a salary. Unlike real estate agents and loan officers, they aren’t paid based on a percentage of the sales price or loan amount, although they can earn commission based on the quality of their work.</p> <p></p> <h3>How Much Does An Escrow Officer Make?</h3> <p>Thinking about becoming an escort officer yourself? If so, you’re probably wondering how much an escrow agent makes while acting as a mediator in such valuable transactions.</p> <p>The salaries of escrow officers in the US range from $20,870 to $187,200, with an average salary of roughly $50,000. However, geographical location can make a difference in an escrow officer’s salary. For example, the average escrow officer salary in California is estimated to be about $65,062 per year, while escrow officers in Detroit and Michigan, for example, report making an average of $54,891.</p> <p></p> <h2>The Bottom Line</h2> <p>Escrow is a vital part of real estate, especially when purchasing a home. It protects buyers and sellers during transactions and offers a convenient way to pay for taxes and insurance, so the transaction can run smoothly. That’s why it’s always a good idea to find a reliable escrow officer, who will seamlessly manage the entire process and provide you with peace of mind by taking on all responsibility.</p> <p>Already Googling “escrow officers near me”? No need to. WIth Lightspeed Escrow, you can expect fast, low-cost real estate transactions on any escrow service you need throughout Southern California. We make real estate closings quick and painless. Don’t let a lucrative deal fall through due to technicalities or delays. <a href="https://lightspeedescrow.com/contact-us">Get in touch</a> for reliable, expert, and expedient escrow services today!</p>
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      • body<script type="application/ld+json"> { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://lightspeedescrow.com/blog-post/different-types-of-escrow" }, "headline": "Explaining Different Types of Escrow", "description": "It is scary to put your hard earn money in someone's hands just based on trust. But there are many types of escrow accounts, protecting both parties in the transaction.", "image": "https://lightspeedescrow.com/files/blog/065e45b7-1336-44c0-89da-ad00de1d8bd6_sale-purchase-contract-to-buy-a-house.jpg", "author": { "@type": "Organization", "name": "Lightspeed Escrow", "url": "https://lightspeedescrow.com/" }, "publisher": { "@type": "Organization", "name": "Lightspeed Escrow", "logo": { "@type": "ImageObject", "url": "https://lightspeedescrow.com/img/logo.png" } }, "datePublished": "2022-07-07", "dateModified": "2022-07-07" } </script> <p>When two people enter a business that requires a transaction, there is often a factor of trust involved. Although most people have good intentions, it is scary to put your hard earn money in someone's hands without knowing what they are capable of and if they are looking for a naive victim. That is why there are different types of escrow accounts, protecting both parties in the transaction.</p> <p>Escrows are always run by an impartial third party - an escrow company or a title company - and have no other connections with the seller/lender/landlord or buyer/borrower/renter. Escrow accounts serve to create a safe and fair space for a transaction.</p> <h2>What Is an Escrow Account in General?</h2> <p>Escrow accounts are one of the best ways to ensure trust between two parties involved in any kind of transaction. Held by an impartial third party, they do not belong to either side. When an escrow account is opened its owner is an escrow holder, and that person is transferring the money or other assets only on these separate occasions:</p> <ul> <li>If the applicant (buyer/borrower/renter/) and the beneficiary (seller/lender/landlord) come to an agreement and every point of the sales contract is respected, then the escrow money goes to the seller - the transaction is done.</li> <li>If the buyer backs out of the sale, but under conditions not permitted under the sales contract, then the escrow money goes to the seller - the transaction is stopped.</li> <li>If the seller backs out under disallowed conditions, the escrow money goes back to the seller - the transaction is stopped.</li> <li>If the due date for paying a lump sum has come, the money that the homeowner paid monthly will be transferred to insurance companies, IRS, and others.</li> </ul> <p>An escrow account in the most simple way is a protector of assets, both financial and others, such as deeds and patent rights. It deals with the problem of trust in business and creates a safe space for applicants and beneficiaries.</p> <h2>Escrows in Real Estate</h2> <p>Escrows are used in real estate for several reasons, and they are a very frequently used transaction method. As you’re entering the market, either rental or home buying, you’ll see that escrows await you every step of the way.</p> <p>Homebuying is almost impossible to conduct without an escrow account between a seller and a buyer because it is such a large sum of money that no one wants to risk it. Renal and <a href="https://lightspeedescrow.com/blog-post/mortgage-escrow-account-pros-and-cons">mortgage escrows</a> are not always obligatory, but they are highly advised, as they can save you a lot of trouble in the long run.</p> <h3>Home Buying Escrow Accounts</h3> <p>Homebuying escrow accounts hold the buyer’s earnest money deposit until all the contingencies of the purchase agreement have been met. Once the buyer makes an offer and the seller accepts it, the earnest money deposit will be transferred to an escrow account. An escrow agent will be in charge to hold the money and keep track of the contingencies and conditions that the buyer and the seller need to meet.</p> <p>Once each party has done its part, and they are both content to move forward with the sale - their escrow agent will be present at the closing. At closing, the escrow money is transferred to the buyer's account and that real estate transaction is over, after which the escrow account closes.</p> <p>There are a few circumstances that favor neither the seller nor the buyer. According to the <a href="https://lightspeedescrow.com/blog-post/escrow-agreement">escrow agreement</a> and the purchasing contract, the money will be transferred back to the buyer if there are any unmet conditions or undisclosed issued by the seller. The escrow provider has to transfer the money to the seller if the buyer backs out of the sale without legal cover.</p> <h3>Mortgage Escrow Accounts</h3> <p>When the <a href="https://lightspeedescrow.com/blog-post/earnest-money">earnest money deposit</a> is transferred to the seller’s account it is not the end of the sale. If you are a borrower your lender will transfer the money to the seller as well, and you have to pay it back with interest. You will be paying a monthly mortgage payment, which consists of a loan principal and interest, but your homeowner costs don’t end there.</p> <p>Among other things, as a homeowner, you need to pay some annual or semi-annual costs, such as homeowners insurance and taxes. If you fail to pay your homeowner costs, your lender might have a problem selling the house or getting any money out of it.</p> <p>To ensure that the property is a smart investment, the lender will often require you to open an escrow account and pay monthly escrow payments. Those escrow payments are then stored on the account and disbursement comes when the fees and taxes are due. Their due dates and amounts are defined in an escrow agreement.</p> <p>Mortgage escrows have three types of real estate transactions: from the homeowner to the escrow account, where it builds up, from the escrow to the insurance companies and other institutions, and if there is anything left on the balance sheet - it goes back to the homeowner in a form of a refund.</p> <h3>Renting Escrow Account</h3> <p>The relationship between renters and their landlords can be complicated. There are plenty of landlords who try and take advantage of their tenants, but there are also renters who want to pay less or nothing for their accommodation.</p> <p>An escrow company or just an escrow account can help mediate their transactions. For example, if the landlord doesn’t provide necessities (water, heat, electricity) or doesn’t address the issues he is responsible for, the renter has the right not to pay their rent.</p> <p>However, instead of just denying to pay, they are sometimes required to open an escrow account, to show that they are serious about living in that place, and not just avoiding payments. Once the landlord resolves the issues, the escrow payments, in a form of collected rents, are transferred to his account.</p> <p>Safety deposits can also be saved up on an escrow account so that the landlord can keep track and doesn’t mistakenly spend it on something else.</p> <h2>Escrows in Trading and Business</h2> <p>Although escrows are a very common tool for real estate transactions, this doesn’t mean that other industries don’t use them, and often. We’ll list a few escrow accounts that you might encounter or hear about.</p> <h3>Online Shopping</h3> <p>Any type of online transaction can be helped by an escrow account for the full protection of both parties.</p> <h3>Software Escrow Accounts</h3> <p>When the buyer and software developer negotiate an agreement for licensing software, the escrow account acts as insurance. This is because the software developer can sell their product with a flaw, and once the deal is done, he can disappear and the software will not run. The escrow account will actually be a vault where all the code material is stored until the release conditions are met.</p> <h3>Freelancer Escrow Accounts</h3> <p>Freelancer escrows are a new and rising trend that started since freelance and remote work began spreading across the world. Escrow accounts for freelancers is ensuring that the freelancer will do their job and that their employer will pay them as previously agreed.</p> <p>When the freelancer is commissioned, the employer will transfer the escrow money to an impartial holder. When the freelancer does their job, the money will be released to them, if they fail to do the assignment, the employer will keep the money.</p> <h3>Construction Escrow Accounts</h3> <p>A construction escrow account is a part of both business and real estate types of escrows. That is because they are used by construction professionals for construction loans. When a housing developer wants to build a new house or totally renovate an old one, that’s when they go for a construction loan.</p> <p>The lender then opens an escrow account and funds the whole operation stage by stage. The developer can access the funds only by showing detailed receipts about the expenses.</p> <h3>Inheritance Escrow Accounts</h3> <p>When a person dies, their assets go into an escrow opened by tax authorities. This is to ensure that their surviving relatives will pay inheritance taxes and taxes that are left unpaid by the deceased.</p> <h3>Cross-Border Trade Escrow Accounts</h3> <p>Cross-border trade escrow accounts are opened for the purpose of exporter-importer transactions. The importer transfers the money onto an escrow account, escrow service provider verifies the payment and requests the start of exports. The exporter will get the money as soon as the goods arrive at an agreed location and time.</p> <h2>Do You Need to Open an Escrow Account?</h2> <p>If you need a reliable and specialized escrow holder, contact <a href="https://lightspeedescrow.com/">Lightspeed Escrow</a> and get in touch with one of the most professional <a href="https://lightspeedescrow.com/blog-post/what-does-an-escrow-company-do">escrow companies</a> in California. We are real estate experts and we know how much time can an escrow transaction take, that’s why we wanted to take matters into our own hands. We guarantee innovative escrow services and solutions.</p>
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