Escrow
An escrow account is set up by your lender to pay your homeowners insurance and property taxes. Both of those bills are sent directly to your lender and are paid annually, but most lenders require you to pay 1/12th of the annual bill each month as part of your monthly payment. The lender deposits the partial payments in an escrow account, where they’ll accumulate until it’s time to pay your taxes and insurance the following year.