What is escrow for taxes and insurance?
An escrow or impound account is an account we set up for you to prepay certain recurring costs associated with your mortgage and home ownership, such as property taxes and homeowner’s insurance. You will normally be expected to prepay (into your escrow/impound account) your first 6 months of taxes, your first 2 months of homeowner’s insurance, and your first 2 months of mortgage insurance (if required). These amounts are not technically closing costs (even though they are due at closing), since they are prepayments of future recurring costs, as opposed to one-time fees associated with the loan. Compare our loans or speak to a CitiMortgage Mortgage Consultant to help understand if paying points or using an escrow account makes sense for you.
