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What is escrow, and why is it in my mortgage payment?

Escrow is an account your lender keeps to pay your property taxes and homeowners insurance for you. Part of each monthly payment goes into it.

Find my homeAnswered by Nick GutheryUpdated October 26, 2026

Once a year the lender checks the account. If your taxes or insurance went up, your payment can go up too.

On a new home, the first tax bill can be low because it may count only the land. Ask the lender to set your escrow on the full value, so your payment does not jump later.

More questions

  • What is the final walk-through on a new home?It is your last look at the home before closing. You check that everything works and point out anything that needs fixing.Read the answer
  • Do I need my own lawyer to close on a house in Georgia?Usually not. In Georgia, a closing attorney runs the closing for the sale. You can hire your own if you want one.Read the answer
  • Do I pay the first year of homeowners insurance at closing?Usually, yes. The first year is paid at or before closing, and a little more is set aside so the lender can pay next year's bill for you.Read the answer
  • How do I set up power and water in a brand new home?Ask the builder which companies serve the home. Then set up power, water and internet to start on your closing day.Read the answer

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