An escrow account is a special account dedicated to covering the costs for:
- Real estate taxes
- Homeowner’s (hazard) insurance
- Mortgage insurance, if applicable
- Catastrophe (wind) insurance, if required
- Flood insurance, if required
While escrow accounts generally include escrows for both taxes and insurance, in some cases, escrow accounts only cover property taxes or insurance. If you have an escrowed loan, part of your monthly loan payment is put into your escrow account. During the year, Rushmore takes payments from the escrow account to pay your current taxes and, if applicable, your homeowner’s insurance premiums as they become due and payable.
Learn more in our What is Escrow? video.