What is an escrow account and why is my lender collecting so much money for it?
An escrow account is established with a lender to pay for recurring expenses related to your property, such as real estate taxes and homeowners insurance. It helps you to anticipate and manage payment of these expenses by including these expenses as a portion of your monthly mortgage payment. Sometimes, your lender will allow you to waive the escrow account; sometimes its mandatory. At closing, the lender will collect sufficient funds to start your escrow account, typically 2-3 months worth of real estate taxes and up to a 12 months of homeowners insurance.
