Escrow is not a French appetizer.

That’s something completely different and personally not our cup of tea. However, escrow is something to savor. Simply put, an escrow account is like a separate side account that’s there to cover your property taxes and/or your homeowner’s insurance. Think of it as a little stash of money that we safely tuck away for you to pay for property taxes and homeowner’s insurance.


Your yearly escrow physical.

It’s like a little check-up from the mortgage doctor. Once a year, your loan servicer reviews your escrow account to make sure that it’s in healthy shape for the upcoming year. In other words, making sure you have enough in your account to pay for your property taxes and/or your homeowner’s insurance.


Simple FYI: Your escrow, taxes and insurance rates are not determined or controlled by us in any way shape or form. The amounts are determined by your local tax authority and your insurance company. On top of that there are specific limitations and requirements set by the US government around your escrow account balance to protect you. We don’t make the rules, but we’ll do everything in our power to help you understand how these aspects of your mortgage work.


It’s just like Monopoly.

You have to pay taxes on your property. An escrow account takes care of this for you and makes paying your property taxes totally simple. You won’t get $200 every time you pass go but you won’t wind up in jail either.


Insurance Insurance

The biggest advantage to having an escrow account is that your homeowner’s insurance is included in your monthly mortgage billing statement—making payments easier to manage and insuring your insurance is always up to date.


What happens if my escrow account comes up a few shingles short of a roof?

First of all, don’t freak out. Under certain conditions this can happen occasionally. On the flipside you can also wind up with an overage in your escrow account. In most cases you will be given options for example:

Option 1, Pay shortage in full or

Option 2, Make a partial payment towards shortage.

If you do not choose Option 1 or Option 2, the shortage will be automatically spread over 12 months.


You mentioned something about an overage in my escrow account?

Yes, under certain conditions your annual insurance premium, taxes (or both) come out less than originally expected. That leaves you with an overage in your account. You’ll receive a check for this overage. Take a look at the escrow analysis statement included with the check—it will show you how the overage was calculated. Then go get yourself something nice. You deserve it.