Buyer Yancy offered $6,750 in earnest money with an offer that was accepted. Both Yancy and the seller want the escrow account to be interest bearing. Will this be allowed?

A) Yes, escrow accounts can be interest bearing if both parties agree. B) Yes, escrow accounts can be interest bearing if the escrow amount is over $5,000. C) No, escrow accounts cannot be interest bearing unless the escrow amount is over $10,000. D) No, escrow accounts can never be interest bearing.

Question

Business

Zane

1 July, 07:25

Buyer Yancy offered $6,750 in earnest money with an offer that was accepted. Both Yancy and the seller want the escrow account to be interest bearing. Will this be allowed?

A) Yes, escrow accounts can be interest bearing if both parties agree. B) Yes, escrow accounts can be interest bearing if the escrow amount is over $5,000. C) No, escrow accounts cannot be interest bearing unless the escrow amount is over $10,000. D) No, escrow accounts can never be interest bearing.

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Answers (1)

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Skylar · Answer 1

A) Yes, escrow accounts can be interest bearing if both parties agree.

Explanation:

Usually escrow accounts are not interest bearing, mainly because the money is not held for a long time, at most a few months. The US Department of Housing and Urban Development (HUD) doesn't say anything about escrow funds being deposited in interest bearing accounts, but it doesn't prohibit it.

Therefore if both parties agree, then there should be no problem with it.