Escrow accounts are accounts that the lender opens, into which you make monthly payments for property taxes, insurance, or other assessments. The lender pays these items from the escrow account as they become due. An escrow account is sometimes known as an "impound account". The portion of your monthly mortgage payment that is deposited to the escrow account is called the escrow payment.
Escrow accounts are great tools for first time homebuyers and anyone with fixed income, as they help the homeowner pay for the bills monthly rather than having to budget for a large annual expense.
Make sure you ask your Loan Officer if an escrow account is right for you.