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What is an Escrow Account?

If you have a mortgage with CS Home mortgage, you have an escrow account. This is a bank account set up and managed by your mortgage lender for the purpose of paying certain expenses associated with your home such as property taxes, homeowners’ insurance, and more. On your monthly mortgage statement, you can find the amount you pay into your escrow account as well as the current escrow balance.

Escrow Account FAQs

Why are you collecting funds on real estate taxes and insurance when this was paid as part of closing?

Any taxes or insurance premiums paid at closing were either prorated between buyer and seller or used to fund your escrow account’s initial required amount. Escrow must continue to be collected to pay for future tax bills and insurance premiums.

Why did my escrow payment change?

The escrow amount included in your monthly mortgage payment is based on the annual cost of your insurance premiums and tax bills. If these costs change, your escrow payment will adjust accordingly.

What is an escrow shortage?

An escrow shortage means your taxes or insurance premiums increased or ended up being higher than expected.

How do I pay my escrow shortage?

You can pay the shortage in full with one extra payment or break it down into an extra amount added to your monthly payment over the course of a year.

Will my escrow payment remain the same if I pay my shortage in full?

While it would not adjust to repay the escrow shortage, it could still change if your real estate taxes or homeowners insurance premium change.

What is an escrow surplus?

This means you ended up with more in your escrow account than needed to pay your escrowed expenses for the year. Depending on the amount of the surplus, you may either be issued a refund or have next year’s escrow amount reduced according to the surplus left in your account.

What is an escrow deficiency?

If your escrow balance goes into the negative, this is a deficiency. It’s possible to have both an escrow deficiency and a shortage at the same time. You can either pay the difference in full or add it to your monthly escrow payment for the next year.

How do I pay my escrow deficiency?

You can pay the deficiency in full with one extra payment or break it down into an extra amount added to your monthly payment over the course of a year.

What is an escrow cushion?

This is the minimum amount that must be kept in your escrow account at all times to cover unexpected increases in expenses.

Can I keep my payments from increasing?

While there is no surefire way to prevent your property taxes and insurance premiums from going up, you can always talk to your homeowners insurance company about your coverage and review your annual tax assessment. There may be tax exemptions you can qualify for.

Still Have Questions about Escrow?

If you have additional questions about your mortgage escrow account, contact CS Home Mortgage to speak to a lender, call us at 479-253-2265, or stop by any of our convenient locations in Northwest Arkansas and Southwest Missouri.