Should you continue making your mortgage payments once you’re in escrow?
This is a question we get all the time! Let your Escrow Experts break it down for you.
Many times sellers and borrowers are confused as to whether or not they should continue to make their mortgage payments on the property they’re selling once it is in escrow. The thing to remember is that if you don’t continue to pay your loan on time as dictated by your note, your lender will assess a late charge against you—even if the property is paid off after the payment due date.
If your closing date is on or before your loan due date, you should let your Escrow Expert know if the payment has been submitted. She will either order an updated statement if the payment’s already been processed or advise the title company to hold the payment if it hasn’t been processed yet. This ensures you avoid an overpayment being made on the account.
Once the lender has received the payment, they will begin the process of refunding any overpayment of interest, as well as refunding the escrow/impound account to the seller or borrower.
You may decide against making payments to your lender while in escrow. If so, note that interest will continue to accumulate and late charges will be added until a payment or a payoff (once you’ve closed) has been received.
In the end, you as the seller and borrower decide how you handle this transition. Your real estate agent can also help in these matters as far as giving advice on your best course of action. But if you’re unsure or have general questions, ask one of our friendly Escrow Experts here at North Orange County Escrow to shine a light!By Donna Wardman, Escrow Expert for over 20 years