What is escrow? Is it required for my loan?
Escrow is where a portion of the real estate taxes, private mortgage insurance (if applicable) and homeowners insurance on your property is included in your monthly payment. They are held in an escrow account until they come due and the mortgage company pays them from this account. To calculate how much this will add to your monthly payment, calculate the total amount due in a year for real estate taxes, private mortgage insurance (if applicable) and homeowners insurance and divide that number by twelve. You may waive the requirement to escrow for homeowners insurance for any loan. However there are requirements that must be met to waive escrow for real estate taxes on your primary residence. Investment properties are required to escrow real estate taxes.
