Escrow Account Management

Once you successfully close on your home, your relationship with escrow often continues through your monthly mortgage payments. For most homeowners, the lending bank establishes an ongoing escrow account to manage recurring housing expenses. Each month, a portion of your mortgage payment is automatically set aside in this account to cover your annual property taxes and homeowners insurance premiums when they come due.

It can be confusing and stressful when your monthly mortgage payment suddenly fluctuates from one year to the next. In most cases, these adjustments occur because local property tax rates have changed or home insurance premiums have increased. Because the bank is legally required to ensure these bills are fully covered, they must adjust your monthly collection amount to match the rising costs of these external services.

If you ever receive a notification stating that your escrow account has a "shortage," there is no need to panic. This simply means that the actual bills for your taxes or insurance were higher than the bank initially projected for the year. Our team helps clarify these statements and explains how the calculations work, giving you the insight needed to manage your household budget and keep your property expenses perfectly on track.