How do I Choose the Best Escrow Calculator?

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  • Written By: Patrick Roland
  • Edited By: A. Joseph
  • Last Modified Date: 08 December 2019
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Escrow is an often-overlooked element of real estate mortgage payments, and a calculator helps factor in this amount. Escrow is used in many industries, but it generally refers to money set aside to pay real estate property taxes and insurance. An escrow calculator takes five factors about the loan and provides a detailed look at how much this added cost will effect your monthly mortgage payments. Primarily, there are two different forms of calculator, either the online version or the downloadable version, and all you need to do to choose the best one is to decide which one you prefer.

Escrow costs usually refer to real estate money being held by a bank in order to prevent you from having to pay yearly lump sums for things such as real estate taxes and homeowner's insurance. An escrow account is funded by a monthly sum that is added to a mortgage payment and that represents one-twelfth of a property's property tax and hazard insurance. Escrow also can refer to internet escrow, banking and intellectual property, but they are less common forms of escrow.


An escrow calculator frequently is used before a mortgage is completed, in order to give you an estimate of how much these added payments will cost. An escrow calculator needs five key pieces of information to properly provide this data. Yearly real estate taxes are the most important figure to enter into a calculator, because it is the primary basis for all escrow. Flood insurance, fire insurance or a combination of all insurance costs is another important figure to enter into a calculator. The loan length, usually in terms of months, also is needed, as well as the total loan amount.

These five numbers, after they are entered into an escrow calculator, will give you an idea of the added payment and, thus, the total monthly financial responsibility necessary to pay off your property's mortgage. The first piece of data that a calculator provides is what your mortgage, without escrow, will cost per month. Next, the calculator usually breaks down how much the property tax and insurance will cost per month. Finally, these three figures are added together to give you an idea of the total amount you must pay each month.

There are two types of escrow calculators available. An online escrow calculator is the most common and usually is embedded on a website that allows you to enter all of this data quickly. Some escrow calculators can be downloaded and accessed when you are not online, and many of these are free. You can try both kinds and decide which one you prefer to use.


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