What does Escrow Account mean?

An escrow account is a special account that is set up by the lender for the purpose of holding money for certain expenses related to a mortgage loan, such as property taxes and insurance. The borrower makes regular payments into the escrow account, and the lender uses the money to pay these expenses on behalf of the borrower when they come due. This helps to ensure that the borrower has the funds to pay these important expenses, and also helps to protect the lender's interest in the property.

Related Terms

Bundle of Rights Federal National Mortgage Association Acre Foot Real Estate Broker Classified Property Tax Tap Fees Refinancing Gross Income Federal Housing Administration ( FHA) Liabilities Group Home Freddie Mac Loft Insurance Binder Low-Down-Payment Loan Additional Rent Purchase Agreement Certificate of Title