Escrow Account (Tax and Insurance)

Intermediate 🏠 Real Estate

Definition

A mortgage servicer's account holding funds for property taxes and insurance, where your money sits earning nothing.

Example Usage

The bank required an escrow account for taxes and insurance, adding $300 monthly to the mortgage payment.

Origin

Standard mortgage practice in many states

Fun Fact

Escrow accounts earn zero interest while lenders benefit from the float of customer funds.

Source: Mortgage servicing practices

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