What is an escrow account and how does it work with your mortgage?
In this video, mortgage expert Dave Steinberg breaks down escrow accounts in simple terms. Learn how lenders collect monthly payments for property taxes and homeowners insurance, why you pay insurance upfront at closing, and what happens when escrow costs increase. If you’re a first-time homebuyer or trying to decide whether an escrow account is right for you, this video explains everything you need to know.
👉 Topics covered:
Mortgage escrow accounts explained
Property taxes and homeowners insurance
How escrow payments are calculated
Escrow shortages and payment adjustments
Pros and cons of escrow accounts
What You'll Learn In This Video
- Explains what an escrow account is and why mortgage lenders use it
- Escrow works like a separate account managed by your mortgage company
- Covers how homeowners insurance escrow payments are collected monthly
- Explains the option to pay insurance and property taxes yourself vs. escrow
- Breaks down why you pay insurance upfront at closing
- Clarifies why you still start monthly escrow payments after closing
- Shows how escrow ensures money is available when tax and insurance bills are due
- Discusses what happens when insurance or property taxes increase
- Explains escrow shortages and how lenders help you catch up
- Shares why escrow accounts help smooth out mortgage payments and simplify budgeting
Dave Steinberg NMLS: #67325 Mortgage Broker Summit Funding
⏱️ YouTube Chapter Timestamps
00:00 What Is an Escrow Account?
00:22 How Escrow Works with Your Mortgage
00:44 Paying Insurance Yourself vs Using Escrow
01:01 Why Insurance Is Paid Upfront at Closing
01:24 When Monthly Escrow Payments Begin
01:46 Escrow for Property Taxes & Other Expenses
02:09 What Happens When Escrow Costs Increase
02:30 Escrow Shortages Explained
02:45 Why Escrow Makes Mortgage Payments Easier
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Connect with me:
Office: 718.575.1166
Email: dave@summitfunding.com
https://summitfunding.com
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