An escrow account is managed by a neutral third party (the escrow agent) who holds money or documents until both buyer and seller fulfill their obligations.
Escrow in Real Estate
During a home purchase, the buyer's deposit goes into escrow until closing. After closing, lenders often maintain an escrow account to collect monthly property tax and insurance premiums alongside your mortgage payment.
What's Included
- Property taxes (paid annually or semi-annually)
- Homeowner's insurance premiums
- Private Mortgage Insurance (PMI) if applicable