What is escrowMortgage Basics
Escrow is a financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction. The escrow agent, who is usually a lawyer or an independent party, ensures that both parties fulfill their agreed-upon obligations before the funds are released.
In simpler terms, escrow protects the buyer and the seller in a transaction by ensuring that the buyer has the funds to make the purchase and the seller delivers the product or service as promised. Once both parties have met their obligations, the escrow agent releases the funds to the seller.