Escrow
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Escrow is a neutral third-party arrangement that holds funds or documents until the conditions of a transaction are met.
What Escrow means
It appears twice in homebuying: an escrow holds the deposit and funds during closing. An ongoing escrow account collects monthly amounts for property taxes and insurance.
Florida example
At a Florida closing, the title company acts as escrow agent, releasing funds only when all conditions clear. After closing, your servicer's escrow account spreads the annual tax and insurance bills across twelve payments.
A neutral holding
Escrow is money or documents held by a neutral third party until a deal closes. Your earnest money sits in escrow before closing, and your taxes and insurance funds sit in escrow after.
It protects both buyer and seller by keeping funds safe until conditions are met.
Two kinds of escrow
There is closing escrow, which holds funds during the purchase, and an ongoing escrow account that collects your taxes and insurance with each payment.
We explain both so nothing feels like a mystery. Reach out and we will walk you through how escrow works on your loan.