An escrow account is not required for most borrowers. However, having an escrow account usually helps in getting the best rate and maintaining your peace of mind.
If you choose to have an escrow account:
The annual amount of your property taxes and homeowners insurance will be divided by 12.
Your monthly mortgage payment will be increased by this amount.
Your mortgage provider will pay your taxes and insurance for you out of the escrow account.
Your total payments are the same, and you may get a better rate.
Without an escrow account, you are responsible for paying your tax and insurance bills directly.