Mortgage Escrow Account

A Mortgage Escrow Account is established to pay on-going expenses while there is a loan on the house. These expenses include property taxes, home insurance, and mortgage insurance if applicable. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.  Typically, you must use an escrow account to pay these itmes if you have less than 20% equity in your home.  If you have 20% or more in equity you may have the ability to waive using an escrow account.  However, waiving the escrow account typically adds extra fees to your closing costs.