Escrow

Escrow: A Situation In Which A Third Party, Acting As The Agent For The Buyer And The Seller, Carries Out The Instructions Of Both And Assumes The Responsibilities Of Handling All The Paperwork And Disbursement Of Funds At Settlement Or At Closing. Most People Who Have A Mortgage Have An Escrow Account Where Their Lender Holds Money For Property Taxes Or Homeowners Insurance. This Allows You To Split Taxes And Insurance Over 12 Months Instead Of Paying It All At Once. Your Lender May Add Escrow Payments To Your Monthly Mortgage Dues Along With Principal And Interest Payments.