What Is a Refundable Cushion Escrow?

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A refundable cushion escrow is essentially funds that are set aside to cover unanticipated expenditures. Find out about a refundable cushion escrow with help from an accounting professional in this free video clip.

Part of the Video Series: Accounting & Finance
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Video Transcript

Hi, I’m Lori Greer from Atlanta, Georgia, and I’m here today to explain, “What is a refundable cushion escrow?” An allotted cushion is the amount of funds set aside in your escrow account to cover unanticipated expenditures. A couple examples would be increases in your tax bills, or increases in your insurance premiums. Any amount above 50 dollars above the cushion within 30 days after the annual analysis report is provided, your lender is required to refund those excess funds. I’m Lori Greer from Atlanta, Georgia, and that is the definition of a refundable escrow cushion.

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