If you’ve ever heard the word “escrow”, you probably know that it has something to do with real estate. But what, exactly, is escrow, and what does it have to do with buying or owning a home?

Homeowners refinance their mortgages and take cash out of their homes’ equity for a number of reasons, including debt consolidation and home renovations. But does it ever make sense to refinance your mortgage if you don’t need access to a large sum of cash? The answer is a resounding yes—no cash-out refinances are an excellent option for many homeowners.

Knowing how much house you can afford is the first step in the home buying process. If you’re ready to start your journey toward homeownership, make sure you factor these hidden costs into your budget.