What is a mortgage escrow account?

An escrow account is created to cover expenses for your property taxes and homeowner’s insurance as they come due. Not all mortgage loans require an escrow account. However, if an escrow account is needed:

  • Your lender will fund this account through the escrow portion of your monthly mortgage payments.
  • The lender calculates how much you’ll need to pay for insurance and taxes each year, then divide it by 12 months. This amount is added to your monthly mortgage payment.

Check out our Escrow Educational Video for more information.