First-time homebuyers in Augusta, GA are sometimes shocked to learn that their mortgage payment includes much more than just their home price. A typical mortgage payment includes the principal payment on the loan, interest, insurance, and taxes. At Whit Blanchard Insurance Group, we understand that shelling out money for an insurance payment can be difficult; an escrow account is an excellent way to make insurance payments more manageable.
How Escrow Works
Rather than having to pay a large tax or insurance bill at one time, you can include an escrow account as part of your mortgage payment. This is essentially a savings account dedicated solely toward costs associated with owning your home. Because they are worked in as part of your mortgage payment, it’s easier to have the discipline to put this money aside every month.
Each time you make a mortgage payment, a portion of that will go into the escrow account. When it comes time for taxes or insurance to be due, the money comes out of that escrow account.
In many cases, managing an escrow account is simple. Once you have the account set up, you’ll need to do little if anything to maintain it. Your deposits will be made automatically out of each mortgage payment, and your mortgage lender often manages to pay the insurance and tax bills when they are due.
The costs of buying a home can add up, but insurance is definitely not a cost you can avoid. If you’re worried about being able to afford a new home, an escrow account is just one of the many ways to make the cost more manageable. For people buying a home near Augusta, GA, Whit Blanchard Insurance Group is ready to chat about insurance options. Give us a call or stop in today!