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California Real Estate Exam

Category - Vocab

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Once you buy a house, the amount you pay each month includes an extra amount above principal and interest. This extra money is held in a special account to pay your taxes and homeowners insurance when it comes due. This account is called:

an escrow account
a savings account
a regular checking account
both B and C

Explanation

Answer: A. Once you close your transaction, you probably have an escrow account with your lender which is composed of extra money taken from your monthly payments to be put in escrow and pay your taxes and insurance when they come due. The lender pays them with your money instead of you paying them yourself.

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California Real Estate Exam

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California Real Estate Exam

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