What is Escrow?
An account holding funds for property taxes and insurance, paid as part of your monthly mortgage payment. Lenders manage and adjust annually.
Escrow has two meanings in mortgages: (1) During purchase, an escrow account holds earnest money and funds until closing. (2) After closing, an escrow account is maintained by your lender to pay property taxes and homeowners insurance. Your monthly payment includes principal, interest, plus escrow contributions. Lenders analyze escrow annually and adjust payments accordingly.