CalculateRealEstateROI

Financing

Escrow Account

Lender-held account that pays property taxes and insurance from monthly payments.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Spreads tax/insurance bills across 12 months. Required on most owner-occ loans.

Examples

  • $3,600/yr taxes + $1,200 insurance = $400/mo escrow.

Common mistakes

  • Forgetting escrow shortage adjustments at year-end.