Think of it like a savings account dedicated to the tax and/or insurance expenses required for your property—and as your loan servicer, we help you manage it. Depending on the terms of your mortgage, your escrow account may be set up for property taxes, homeowner's/hazard insurance, flood insurance, and/or mortgage insurance. A portion of your monthly mortgage payment is deposited into your escrow account, and these funds are reserved to pay your tax and/or insurance bills when they are due.
Each month, we deposit a fixed portion of your mortgage payment into your escrow account to cover your expected tax and/or insurance expenses, plus a little extra money in case these expenses increase from year to year—this is known as a cushion. Then, we pay each bill out of your escrow account on your behalf.
Since tax and insurance bills can change from year to year, we review your escrow account at least annually to make sure your balance is sufficient. Then, we send you an Escrow Account Disclosure Statement to inform you of any changes in your escrow activity, as well as any corresponding changes to your monthly payment.
Having an escrow account can save you time and make homeownership easier. Escrow helps you budget for large expenses required for your property, giving you peace of mind. We fully manage the account for you, paying your tax and/or insurance bills on your behalf when they are due. We also review your escrow activity at least annually to help ensure the balance is sufficient based on your expected expenses.