Man on a laptop

What Are Escrow Fees?

Explore your mortgage options

NMLS #3030

*Connect with a mortgage specialist

We teamed up with Rocket Mortgage to help you get house-hunting sooner. Answer a few questions and an agent will reach out to discuss your options.

Get Started by selecting an option below

What kind of loan are you interested in?

What to expect

Tell us what you need and a representative from Rocket Mortgage will give you a call. You’ll have support at every step.

What kind of property do you want to purchase? What kind of property do you own?

Why we’re asking

Rocket Mortgage® can provide a more accurate rate estimate if they know what kind of property you’re interested in.

NMLS #3030
How do you use your property? How would you use this property?

Why we’re asking

Having a little more information upfront helps Rocket Mortgage® provide a personalized rate faster.

NMLS #3030
When are you planning to buy?

Still House Hunting?

Hope you find your dream home soon! In the meantime, it’s never too early to know your rate.

NMLS #3030
Are you a first-time home buyer?

It’s all good:

Whether it’s your first – or second property – Rocket Mortgage® can provide you with a rate estimate.

NMLS #3030
Do you have a second mortgage?

It’s all good

If you have a second mortgage, it’s no problem. Letting us know helps to customize your rate.

NMLS #3030
What is your credit score?

Don’t know your score?

Don’t sweat it! Make your best guess. Credit scores range from 300 (low) to 850 (excellent).

NMLS #3030

Tell us a bit more about you

What happens next?

A representative from Rocket Mortgage® will be in touch to discuss your commitment-free, personalized rate. Then you can decide whether you’d like to lock it in!

NMLS #3030

Enter your contact info so Rocket Mortgage® can get in touch!

By providing your contact information and clicking the "Agree & Send Information" button below, you agree to our Terms of Use and Privacy Policy. You also expressly consent by electronic signature to receive telephonic sales, promotional, marketing and other calls and text messages, including any calls and messages sent by any automated system or other means for the selection or dialing of telephone numbers, or using an artificial or prerecorded voice message when a connection is completed, from Rocket Mortgage, its Family of Companies, our partner companies and our marketing partners at the telephone number you have provided, even if that telephone number is on a corporate, state, or national do-not-call list or registry. Your consent and agreement to receive such calls or text messages is not a condition of purchasing any property, goods or services from us, our Family of Companies or any of our partners.

NMLS #3030

“Selling Sunset” fans (bear with us if you aren’t binging the real estate reality show), do you remember the episode when fan-favorite real estate agent Chrishell Stause had to sit and calculate a long list of closing costs, collect money from her client and make sure all the parties involved with the closing got paid?

No? Can’t recall?

Well, that’s because it never happened. An escrow company takes care of all of those services for Chrishell (and all real estate agents) and their clients. 

The period between getting your purchase offer accepted and closing on the home is commonly referred to as “being in escrow.” After you close, a portion of your monthly mortgage payments gets deposited into a second escrow account through your loan servicer to cover your property taxes and home insurance.

We’re focusing on how an escrow provider helps you close on a home. We’ll take a look at how escrow providers are compensated for their services and what escrow fees are charged. 

Escrow fees, or more specifically, escrow servicer fees, are paid to the escrow company for their services. The fees are a part of your closing costs. 

We’ll explore escrow service fees, examine what you pay for and show you how to calculate those fees.

What Escrow Servicing Fees Pay For

Escrow fees pay your escrow servicer for managing and distributing the money put in escrow during closing.

Below is a list of services your escrow fees might cover:

  • Holds funds to be paid out after the closing on your property
  • Distributes the money placed in escrow on time and to the right parties
  • Prorates and pays property taxes on behalf of the buyer
  • Takes on the liability of managing the buyer’s money
  • Preserves the accuracy of the title, deed and other closing documents
  • Acts as a neutral third party between the lender, the buyer and the seller

Calculating Escrow Fees

Escrow services usually cost 1% – 2% of a home’s purchase price. If you’re buying a home for $100,000, the escrow servicing fee would be around $1,000 – $2,000. 

That range, however, is an estimate. The true cost of your escrow servicing fees can vary based on a few things:

  • The escrow company you use
  • The location of the home
  • Whether the escrow provider charges an additional flat fee

Funds Paid Into Escrow

Let’s explore some of the funds you’re paying your escrow provider to collect and distribute. These are made up of a variety of fees, taxes and insurance premiums. 

Here are a few standard things paid into escrow:

  • Property taxes: Closing costs generally include paying 6 months of property taxes upfront. 
  • Mortgage loan origination fee: The loan origination fee pays your mortgage lender for underwriting and processing your loan.
  • Title and deed search fee: The search fee pays for a title search company to check that there are no claims or liens on the house.
  • Title insurance payments: Title insurance protects against claims on your home’s title.
  • Homeowners insurance payments: Home insurance covers unexpected damage to your home.
  • Real estate attorney fee: A real estate attorney reviews all closing documents. 

Who Pays the Escrow Fees?

There is no stock answer to the question of who pays the escrow fees. The answer will always depend on the situation. The buyer, the seller or both parties could be responsible for paying the fees.Who pays for what always comes down to negotiations and what each party is willing to pay. While the easiest thing to do might be to split the fees, it’s not always done that way. The buyer may pay for the entire thing, or the seller could pay the fees as part of their seller concessions.

Escrow May Not Be Glamorous, But…

Escrow fees may feel like an unnecessary expense, but this fee covers some essential services during the closing process. 

  • They are a third party that holds the buyer’s and seller’s money until closing. 
  • They manage and distribute all the money from closing on a house to the appropriate parties so you don’t have to.

Sure, we’re willing to admit that escrow may never be a star player in your favorite real estate reality TV show, but it’s important. Escrow service fees pay for a valuable service and can help ensure a smoother closing process.

Need Mortgage Help?

New home, second home, refinancing, we’ve seen it all. Whatever your goals, expert help is just a click away.

The Short Version

  • Escrow fees pay your escrow company for the services they provide
  • The escrow fee costs between 1% – 2% of the home purchase price
  • Depending on what’s negotiated, the buyer and seller can either split the escrow fee or one of them pays it
Back to top of page

You Should Also Check Out…

Our team of financial experts write, review and verify content for accuracy and clarity.