Question:

Escrow Account Definition

Answer:

An escrow account will be established prior to or at closing the loan anytime you are taking a mortgage. The escrow account will contain items and deposits required by lender to be paid in advance. The borrower will be making monthly payments into the escrow account as stated on the loan agreement and the escrow account will be used by lenders to pay homeowners and mortgage insurance and any property-related taxes.

Usually, establishing an escrow account takes place prior to closing a mortgage and the borrower is required to make a large deposit. The escrow account allows the lender to ensure that property bills and taxes are paid on time; otherwise, the lender may be negatively affected.

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Common misspellings: mortage and morgage