Escrow
Names and abbreviations on this page
CFPB — Consumer Financial Protection Bureau. United States regulator for consumer financial products.
Housing terms & practical skills
What it means
In ongoing mortgage servicing, an escrow account holds money collected for specified bills, commonly property taxes and homeowners insurance. The servicer pays those bills from the account. The word can also describe arrangements holding funds during a property transaction.
Related skills
Read the breakdownSeparate loan repayment from escrow collections.
Track changesReview an escrow analysis and the underlying bills.
Avoid double countingIdentify expenses already included in the payment.
An everyday example
A monthly bill may include $1,400 for principal and interest plus $350 for escrow. The combined payment is $1,750, while maintenance and other charges may still need their own budget entries.
What to check
Escrow contributions can change when taxes or insurance costs change. Check which bills are covered and which you must pay directly.