Escrow can take on many meanings. But if you are using a title company in Texas it can be narrowed to the following:
- Escrow Process: the Buyer and/or Lender deposit funds into the title company’s escrow account, where the funds are held until certain conditions are met, the file is fully “closed”, and disbursements may be made to the Seller and other pertinent parties, such as the seller’s lender payoff.
- Escrow Reserves: where the Lender may require the borrower to put extra funds (reserves) into an escrow account (reserve account) so the lender may disburse the borrower’s reserves for property taxes and homeowner’s insurance, etc, when they become due.
