Questions about Escrow

[Daniel Sabato]

Can someone explain how escrow works? This is all new to me. Let’s say it’s a situation where your principal & interest payment is 200$ per month. Property taxes are 90$ & your insurance is 600$ for the year (which is generally paid up front for the year I believe). What is escrow? Is that a totally separate amount you need to pay to your lender? What’s it for?