Escrow

Escrow is a legal agreement wherein the money or property may be held by a neutral third party under the terms of a legal agreement until a certain event occurs.
It’s a standard part of the home-buying process, and it serves to safeguard the interests of both the buyer and the seller. An escrow account is established to hold money for property taxes and insurance premiums for the duration of the mortgage.

Escrow is utilized for two primary purposes in the real estate industry:

To ensure that the buyer’s good faith deposit is properly allocated per the terms of the sale.
For the purpose of holding a homebuyer’s money for insurance and property tax payments.

There are two distinct escrow account kinds due to their diverse functions. Both will be used. However, the former will be utilized during the actual purchase of the home, while the latter will be utilized for the duration of the loan.