What Is an Escrow Account?

Learn How Escrow Accounts and Escrow Payments Work

Freedom Mortgage maintains an escrow account in order to pay your property taxes, homeowners insurance, and mortgage insurance—when required.

Your escrow account is like a checking account (although we're not a bank or a credit union). The money in your escrow account comes from your mortgage payments. You make payments toward the cost of your taxes and insurance each month, and Freedom Mortgage pays your tax and insurance bills from the escrow account when they come due.

How Your Escrow Amount Is Calculated

Freedom Mortgage receives the cost of your property taxes and insurance premiums from your local tax authority and insurance companies. We use this information to estimate the money that’s needed to pay these bills during the upcoming year. We divide this total by 12 to get your monthly escrow payment (typically adding a two-month cushion, as allowed by Federal law).

Each year, we perform an escrow account analysis to ensure that your monthly escrow payments will be enough money to pay your tax and insurance costs when they are due. Your escrow payments can change when the costs of your taxes or insurance change. For example, if your real estate taxes increase, your escrow payments may increase in order to cover the higher cost of your taxes. If you get a new homeowners insurance policy at a lower cost, your payments may decrease.

Escrow Accounts When Buying a Home

Homebuyers typically deposit between 1% and 2% of a home's price as earnest money. Earnest money is placed in an escrow account that’s managed by a third party, like a lawyer or a title company. The money stays in this account until all the obligations and conditions that are necessary to the sale have been met and the sale closes. The money is transferred to the seller at closing. This escrow account is different from the one we use to pay your taxes and insurance.

How to See Your Freedom Mortgage Escrow Account Details

You can view escrow details by logging in to your online Freedom Mortgage account. Your monthly statement also contains information about your escrow account.

If you have questions about this account, please see our Escrow Account FAQs. You can also call our Customer Care department at 855-690-5900. Representatives are available to help you, Monday–Friday, 8 AM–10:00 PM, and Saturday, 9 AM–6 PM, ET.