My property taxes went down this year and insurance premium stayed the same. Will mortgage company lower my escrow automatically or do I need to ask them?
Property taxes went down. Will lender adjust escrow?
byu/Vast_Butterfly_5043 inRealEstate
Posted by Vast_Butterfly_5043
8 Comments
Whoever manages your escrow should be doing a yearly evaluation which would include current year increases or decreases and current escrow balance.
How much did they go down? Generally your lender isn’t going to reduce escrow unless and until there is a consistent overage. But contact them and get the ball rolling if the amount is significant to you.
Escrow is tightly regulated by federal law. If your taxes/insurance rates drop, your escrow contribution will drop and you may get a refund, but not immediately.
If you end up with surplus in your escrow account they will refund the difference at years end. Don’t accidently throw the check into the shredder.
They only lower it after they actually pay for it and some time passes. If taxes are just lowered a small amount it can take up to a year for the process to happen.
By law the have to do an annual escrow reconciliation, they will send it to you, if you have credit over the amount (a calculated percentage) allowed by law, they will refund that amount. If short, they will ask you to pay (usually not a good plan for you) or add it to your escrow amount interest free over the next year!
I just get an overage check after thr end of the year.
If you do get the money back, put it into a separate savings account. Something else will go up and they will readjust your escrow again