Ever wonder where your earnest money goes after you sign a contract in Plainfield? Or why your mortgage payment includes taxes and insurance some months more than others? You are not alone. Escrow can feel confusing, yet it is one of the tools that keeps real estate deals fair and on track.
In this guide, you will learn what an escrow account is, how it works in a Plainfield home sale, and how mortgage escrow affects your monthly payment. You will also see what to check with Will County offices and what to expect at closing. Let’s dive in.
Escrow explained for Plainfield buyers and sellers
An escrow account is a neutral holding account that protects both sides until agreed steps are complete. In residential real estate you will see two common types:
- Transaction escrow during a purchase or sale. A neutral party holds earnest money, collects closing funds, and disburses money when contract conditions are met.
- Mortgage escrow after you buy. Your loan servicer collects a share of your yearly property taxes and insurance with each mortgage payment and pays those bills when they come due.
Both matter because they help prevent missed payments, paperwork issues, and last‑minute surprises. They also affect your cash flow, especially if your lender manages taxes and insurance for you.
Transaction escrow during a home sale
How it works in Will County
- You sign a purchase contract and provide earnest money.
- Earnest money is deposited with an escrow holder. In many Illinois deals this is a title or settlement company. Sometimes a broker’s trust account or an attorney holds it, based on the contract.
- The escrow holder follows written instructions, coordinates title work, and prepares closing documents.
- At closing, the escrow holder disburses funds to all parties, pays off any existing mortgage, and the deed is recorded with the Will County Recorder.
Who usually holds the funds
In Plainfield area transactions, title companies and settlement agents commonly hold earnest money and run the closing. Your contract should name the escrow holder and provide contact information. Ask for this in writing early in the process.
Why it protects you
Escrow creates a neutral checkpoint. Buyers know their deposit is secured until inspections, financing, and title are clear. Sellers know funds will be released only when the buyer has met the contract terms. This structure reduces the risk of misunderstandings and delays.
If there is a dispute over earnest money
Start with the purchase contract. It explains how disputes are handled and who decides when funds are released. Contact the escrow holder to understand next steps. In contested cases, legal counsel may be appropriate.
Mortgage escrow for taxes and insurance
What it covers
After closing, many lenders require an escrow account for property taxes, homeowner’s insurance, and sometimes other items like flood insurance if required. Your servicer collects a portion of these yearly costs with each monthly payment and pays the bills when they are due.
How your monthly escrow is calculated
Your servicer estimates the year’s tax and insurance totals, divides by 12, and may add a small cushion. A simple formula looks like this:
- Monthly base escrow = (Annual property tax + annual homeowner’s insurance + other escrows) ÷ 12.
- Cushion: Federal rules allow a cushion up to two months of escrow payments. Some servicers keep less.
Simple example
- Annual property tax: $3,600
- Homeowner’s insurance: $1,200
- Annual total: $4,800. Divided by 12 equals a base escrow of $400 per month.
- Maximum cushion allowed: two months of escrow payments, which is $800 in this scenario. Spread across 12 months, that is about $66.67 per month.
- Example monthly escrow portion: $466.67. Your servicer’s cushion policy and timing can change the actual amount.
Initial funding at closing
At closing, lenders often collect several months of taxes and insurance upfront so there is enough in the account to pay the first bills. The amount depends on due dates and your closing date.
Annual escrow analysis, shortages, and refunds
Servicers must run an annual escrow analysis. If your costs rose, you might see a shortage. If costs fell or were overestimated, you may see a surplus. Key points to know:
- Lenders can keep a cushion up to two months of escrow payments to cover timing gaps.
- If there is a shortage, you can often pay it in a lump sum or spread it over up to 12 months. Policies vary by servicer.
- If there is a surplus above a small threshold, servicers must refund it. A common trigger is a surplus greater than $50.
If you get a large shortage notice, ask your servicer for a breakdown that shows each tax and insurance payment, due date, and the projected balance.
Are escrow accounts required?
Many lenders require escrow for taxes and insurance, especially for government‑backed loans such as FHA or VA. Some conventional loans may allow you to waive escrow for a fee or certain conditions. Ask your lender early so you can plan your monthly budget.
Plainfield and Will County details to verify
Property taxes and timing
Will County uses its own calendar for tax billing, installments, and penalties. Confirm the parcel number, recent tax amounts, and due dates with the Will County Treasurer. Make sure any estimates in your loan disclosures match what the county bills.
Insurance and flood zones
Insurance premiums reflect local construction costs and claims patterns. If a property is in a FEMA Special Flood Hazard Area, lenders typically require flood insurance. If flood insurance is required, that premium is usually included in the escrow account.
Selling a home in Plainfield: your escrow at payoff
When you sell and your mortgage is paid off, your servicer will reconcile your mortgage escrow account. Here is what to expect:
- Any escrow surplus is usually refunded to you at or after closing. Timing varies by servicer.
- Taxes and insurance are prorated between you and the buyer based on the contract and local custom.
- The buyer’s lender will create a new escrow account for the buyer’s future tax and insurance payments.
Buyer checklist: escrow made simple
- Ask who holds the earnest money and get the escrow holder’s contact info in writing.
- Confirm if your lender requires escrow for taxes and insurance.
- Review the initial escrow disclosure and the closing disclosure. Know how much of your payment goes to principal and interest versus escrow.
- Verify the property’s tax amount and due dates with the Will County Treasurer or a recent tax bill.
- Ask your lender which insurance types are required and if premiums will be escrowed.
Seller checklist: smoother closing and payout
- Request your mortgage payoff and current escrow balance from your servicer.
- Share proof of HOA dues paid, recent tax bills, and any insurance documents the title company requests.
- Expect prorations for taxes, utilities, and HOA dues on your closing statement.
Common pitfalls and how to avoid them
- Not confirming who holds earnest money. Always get it in writing and verify wiring instructions by phone with the holder.
- Underestimating taxes in your budget. Will County tax amounts and timing can change. Use the most recent bill and calendar.
- Ignoring the annual escrow analysis. Open it, compare to last year’s bills, and ask questions about big changes.
- Missing flood insurance requirements. Check flood zone status early so you can plan for premiums if needed.
How The Jeff Stainer Team helps
You deserve a clear, predictable path from offer to closing. Our team brings decades of local experience in the western and southwestern suburbs, including Plainfield. We coordinate with title and lending partners every day, and we know how escrow impacts timelines, net proceeds, and monthly payments. That means fewer surprises for you, whether you are buying your first home or selling and moving up.
If you want a second set of eyes on your disclosures or need a Plainfield‑specific game plan for taxes and timing, reach out. We are here to make each step understandable and stress‑reduced.
Ready to talk through your escrow questions or plan your next move in Plainfield? Connect with Jeff Stainer for local guidance backed by verified results.
FAQs
Who holds earnest money in a Plainfield home sale?
- In many Illinois transactions a title or settlement company holds earnest money. Sometimes a broker’s trust account or an attorney holds it. Your purchase contract should name the escrow holder.
Are mortgage escrow accounts required for all loans in Plainfield?
- Many lenders require escrow for taxes and insurance, especially on government‑backed loans. Some conventional lenders may allow a waiver for a fee, but policies vary.
How much escrow cushion can my lender keep?
- Federal rules generally allow a cushion up to two months of escrow payments. Servicer practices may differ within that limit.
What happens to my escrow money when I sell my Plainfield home?
- Your servicer reconciles the escrow account at payoff. Any surplus is usually refunded to you at or after closing, and taxes or insurance are prorated per the contract.
Which local offices handle taxes and recording in Will County?
- The Will County Treasurer handles tax billing and payments. The Will County Recorder manages deed recording. Assessment questions go to the Will County Assessor or Plainfield Township Assessor.
