The first time you fulfill the “American Dream” in buying your first house is a real adventure. Terms like title, title company, escrow, mortgage, fha requirements, inspection all seem pretty foreign. In this case, “learn from experience” is not the best way to go. You can buy smart with a little training.

Your investment is too large to just “learn by experience”. For example, you will have to decide which type mortgage suits your needs the best. Your investment meaning downpayment. If you are considering purchasing a home priced at $100,000, then you would need $10,000 to $20,000 as a downpayment. Would you just hand that kind of money over to someone you didn’t know and have yet to trust? I am sure you would not without considering many things prior to doing it. A “learning curve” would not be the best approach.

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What is mortgage escrow?  The amount you must pay each month to cover your property tax liability and property insurance annually.

Not many people are aware that your mortgage lender may allow you to control your own escrow account.  This has certain advantages.

A self-managed escrow account can be located at the financial institution of your choice.  You can shop for the best deal. If it is interest bearing, you will make a little money as the balance increases.  It may not be a lot but “something is better than nothing.”

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