Escrow Account

An account that a mortgage servicer establishes on behalf of a borrower to pay taxes, insurance premiums, or other charges when they are due. Sometimes referred to as an "impound" or "reserve" account.

A separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc.

Account held by a lender for payment of taxes, insurance, or other periodic debts against real property. The property owner pays a portion of the yearly taxes, insurance, etc., with each monthly payment. The lender pays the tax bill from the accumulated funds. Also called "impound account" or "trust account."

An account that serves a specific purpose, which ends when a certain condition is met or a certain event occurs. There are two main types of escrow accounts relevant to consumer credit:

a separate account into which a portion of each monthly mortgage payment is placed; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc.