Escrow, Taxes, & Insurance

Frequently Asked Questions

Depending on the type of insurance, you will need enough to cover the lower of either the replacement cost of the property or the remaining principal balance on your loan.

Example If your unpaid principal balance (UPB) is $80,000 but the replacement cost is $120,000, you will need to carry a minimum insurance of $80,000 total.

If you obtain a new insurance policy prior to expiration of your existing policy and we paid the new policy from your escrow account, you will have an escrow account shortage because of the new insurance disbursement.

With the cancellation of your prior policy, you should receive a refund on the remaining premium. To address the escrow shortage, please remit the refund from your prior insurance carrier to us for deposit in your escrow account.

When your taxes and/or insurance increase from the amounts paid last year, the escrow portion of your monthly payment will also increase to cover the higher disbursements. The escrow shortage is the amount needed to ensure the escrow account is fully funded in the upcoming year per the requirements under the loan documents, as well as state/federal law.

Note: As your property taxes and insurance premiums increase each year, the amount needed to fund your escrow account may go up each year as well.

If you receive an insurance claim check, visit to get information and next steps.

If, on the off chance, we pay the taxes late, we’ll cover any penalty and interest amount for the late payment by depositing funds into your escrow account.

An escrow account is where funds are held to pay property tax and insurance bills on your behalf. If your loan is escrowed, a part of your mortgage payment goes into your escrow account every month.

We analyze your escrow account around the same time each year depending on the state where your property is located. Read more

If your loan is escrowed, we’ll pay the taxes around 10 business days prior to the date penalty and interest amounts will begin to accrue. We’ll let you know when that happens.

An escrow analysis can raise or lower your monthly escrow payment for the upcoming year due to changes in your tax and insurance amounts. Read more