An account your lender uses to collect and pay your property taxes and insurance with your monthly payment.
Instead of two big annual bills, the lender collects 1/12 each month and pays them for you. Escrow also refers to the neutral third party holding funds during a home sale.
Example: $5,000 annual taxes + $1,800 insurance = $567/month escrowed.
FAQ
What is Escrow in simple terms?
Instead of two big annual bills, the lender collects 1/12 each month and pays them for you. Escrow also refers to the neutral third party holding funds during a home sale.