FAQs
What happens if my escrow account has a shortage or surplus at the end of the year?
Because your local property taxes and homeowners insurance premiums can fluctuate from year to year, it is very common for your escrow account to have either a shortage or a surplus when we perform your annual escrow analysis.
Here is what happens in either scenario:
If You Have an Escrow Shortage
A shortage happens if your property taxes or insurance premiums went up during the year, meaning we had to pay out more than we collected from your monthly payments. To make up the difference, you have two options:
- Option 1: Spread it out (Default). You do not have to pay the shortage all at once. We will automatically divide the shortage by 12 and add it to your new monthly mortgage payment for the upcoming year.
- Option 2: Pay it in full. If you prefer to keep your monthly payment as low as possible, you can make a one-time, lump-sum payment to cover the shortage before your new payment cycle begins.
If You Have an Escrow Surplus (Overage)
A surplus happens if your taxes or insurance premiums went down, or if they were overestimated, meaning we collected more money than we needed to pay your bills.
- For surpluses over $50: We will automatically mail you a refund check for the overage amount within 30 days of your escrow analysis.
- For surpluses under $50: We will simply leave the funds in your escrow account, which will slightly lower your required monthly payments for the upcoming year.