What are tax escrows and how do they work?
Each month, when you make your mortgage payment, part of it is placed in an escrow account managed by your mortgage company. When your taxes are due, they are paid from this escrow account. Depending upon the date you close, there may not be enough time to build up an adequate amount to pay the entire tax bill. Therefore, the mortgage company may request that a number of months of escrow be collected from you at your closing, to ensure that there will be enough money to pay your taxes.
