What is an escrow account?
Escrow accounts are also sometimes called impound accounts. You can think of an escrow account as a simple savings account.
The escrow account is an automatic savings account set up by your mortgage lender, and used by the lender to pay your property taxes or insurance.
For example, your property taxes are $2,500.00 per year. Your lender will tack an additional $209.00 to your regularly monthly payment. Each month that $209.00 will be collected by your lender and set aside in the escrow account. When the property tax payment is due, your lender will make the payment, using the funds that have been saved in the escrow account.
Need more information? Call Joe Elizondo of Northeast Financial at 323-256-7833 or email Joe at neast-financial @ sbcglobal.net.
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