What is a mortgage escrow?
Escrow accounts are used by mortgage companies to collect money from the borrower on a monthly basis to guarantee timely payment of real estate related expenses such as property taxes, home owners’ insurance premiums, etc. Lenders can keep an annual reserve cushion amount equivalent to two-months of each recurring expense. Borrowers are entitled to an immediate refund of escrow if the amount exceeds the two-month cushion and so long as the amount is less than $50.00.
