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Shawn Sethi
Shawn Sethi's picture

What is a mortgage escrow?

Jason Pride
Jason Pride's picture

Hi Shawn,

An escrow account is an account in which your money is held for you and controlled by another party. In the case of a mortgage the escrow account is built up slowly with a portion of your monthly payment and used to pay a variety of expenses including insurance, property taxes, HOA fees, and PMI. The exact expenses to be covered vary based on the requirements of the lender.

Matthew Ledvina
Matthew Ledvina's picture

An escrow account acts as a savings account that is managed by your mortgage servicer. Your mortgage servicer will deposit a portion of each mortgage payment into your escrow account to cover your estimated real estate taxes and insurance premiums. It’s that simple.