Shopping For Your Home Loan: Hud'S Settlement Cost Booklet - U.s. Department Of Housing And Urban Development (Hud) Page 13
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48Escrow Account Information
The GFE also includes a separate section referred to as ‘‘Escrow account
information,’’ which indicates whether or not an escrow account is required. This
account holds funds needed to pay property taxes, homeowner’s insurance, flood
insurance (if required by your lender) or other property-related charges.
If the GFE specifies that you will have an escrow account, you will probably
have to pay an initial amount at settlement to start the account and an additional
amount with each month’s regular payment. If you wish to pay your property taxes
and insurance directly, some lenders will give you a higher interest rate or charge you
a fee. If your lender does not require an escrow account, you must pay these
items directly when they are due.
Summary of Your Settlement Charges
The final section on page 1 of the GFE contains the adjusted origination
charges and the total estimated charges for other settlement services which are
detailed on page 2. You should compare the “Total Estimated Settlement Charges” on
several GFEs.
Page 2 of the GFE
The price of a home mortgage loan is stated in terms of an interest rate and
settlement costs.
Often, you can pay lower total settlement costs in exchange for a
higher interest rate and vice versa. Ask your loan originator about different interest
rates and settlement costs options.
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