New Jersey Real Estate License Exam Practice Question
An escrow or trust account is often held by a lender to pay:
Correct Answer: D
Rationale: An escrow or trust account is typically used to manage funds for property-related expenses, specifically property taxes and insurance payments (D). This allows lenders to ensure these essential costs are covered, protecting their investment.
Option A is incorrect as mortgage payments are generally made directly by the borrower, not through an escrow account. Option B is wrong because interest on a loan is part of the mortgage payment and is not separately managed in an escrow account. Option C is also incorrect; banks do not use escrow accounts for their outstanding invoices, as these accounts are specifically for property-related expenses.
Unlock All Questions
Subscribe to Premium for full access to all practice questions, detailed rationales, and performance tracking.
Subscribe Now