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.
Yes, if you have an escrow account set up for your property taxes and you have received a tax bill, please email a copy to us so we can ensure timely payment.
You will receive a statement from us for the time we serviced your account. We send these statements by January 31st each year. If you are enrolled in paperless statements, we'll notify you by email when your statement is ready to view online. Otherwise, we will mail a paper copy to the mailing address you have provided.
A real estate tax exemption is a reduction (or elimination) of a property tax liability (this is the amount you owe to your local tax authority for a given year). As a homeowner, you can request a property tax exemption from your local taxing authority. The process for requesting a tax exemption and approval timelines vary by taxing authority.
If you have questions about tax exemptions, please contact us. We'll be happy to help!
Not all exemption requests are approved, and some are approved at a lesser amount than you anticipate. As a result, we are unable to change the escrow portion of your monthly mortgage payment until we receive confirmation that the exemption was granted and the amount.
In our experience, taxing authorities may take up to 90 days to process exemption requests. If you have questions about the status of your request, you may contact your taxing authority.
Great news! If you have an escrow account, please email us a copy of the written notification that confirms your tax exemption. We make every effort to proactively monitor your property tax liability to identify new exemptions, however you may be notified that the exemption first.
We review your escrow account at least annually to help ensure it has enough money to cover your expected tax and/or insurance expenses. Next time we review your escrow account, surplus funds of $50 or more will be returned to you if, at that time, your escrow account has sufficient funds and your mortgage is current (meaning no payments are past due).
If our recent annual escrow analysis found a surplus and you received a refund, there are a few possible reasons it was less than expected.
For example, if your escrow account is also set up for other expenses like homeowner’s insurance and/or HOA fees, one or more of these other expenses may have increased.
In addition, a tax refund will be impacted by the effective date of the exemption. If you received a 100% tax exemption effective June 1, 2023, the escrow portion of your monthly payment will be updated at that time. However we may need to retain funds previously collected to in order to cover property taxes due for the period ending May 31, 2023.
Options to remove an escrow account from a loan vary based on factors such as state laws, investor guidelines, loan type, property type and Loan-to-Value (LTV) ratio.
If the loan qualifies, tax payments and homeowners’ insurance premiums may be removed from escrow collection. However, there are certain types of payments that must be escrowed:
Waiver eligibility is dependent on several factors but generally, to qualify for an escrow waiver your loan must be a conventional loan (meaning FNMA/FHLMC) and meet the following requirements:
There may also be state-specific laws regarding when and how escrow waivers can be granted, so additional requirements may apply. Please contact us to confirm your loan's eligibility.
There is a one-time processing fee of 0.25% of the unpaid Principal Balance. If we confirm your loan meets all requirements, you will be mailed a letter specifying the calculated fee and how to make the payment by phone, electronically, or by mail.
It will take us five business days to evaluate your loan and confirm eligibility. You will then be mailed a decisioning letter. If you want to proceed, within 30 days of receiving the required fee, we will remove the escrow collection and mail you a letter confirming completion.