Both my escrow officer and my lender talk about escrow accounts. What’s the difference?- When you make an offer on a property, you generally write a check indicating that you are serious about buying the property. This money is called “earnest money.”
- Your escrow officer deposits this money into an escrow account. At closing, the money is usually applied to the buyer’s down payment and closing costs.
- See our Closing Cost Checklist
- An account opened on your behalf by a mortgage lender is also referred to as an escrow or impound account. This account is not related to the real estate escrow process.
- The account holds funds to pay for property taxes and homeowner’s (or hazard) insurance. Not all mortgages are set up with impound accounts. Often, you may request to pay your taxes and insurance on your own.
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