What is escrow and how does it work?
In: Economics
The Bank doesn’t trust you to pay all the taxes and legal fees and other random payments etc (nor do you want to) that may come up over life of loan so they ask you to pay extra money every period that sits in an escrow account they can use to pay those random taxes etc without annoying you first. At end of loan they’ll pay back whatever is left in the escrow account
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