Can You Request an Escrow Analysis? Here’s How to Do It
Gain financial clarity on your mortgage escrow. Learn how to easily request an analysis and understand its implications for your home payments.
An escrow account is an arrangement where a neutral third party, often your mortgage servicer, holds funds to cover specific property-related expenses. These typically include property taxes and homeowners insurance premiums. This system integrates these costs into a single monthly mortgage payment.
An escrow analysis serves as a mechanism for transparency and adjustment within this system. It allows review of account activity and ensures sufficient funds are collected to meet future obligations. Understanding how to request and interpret this analysis empowers homeowners to actively manage their home-related finances.
What an Escrow Analysis Is
An escrow analysis is a thorough review of your escrow account, typically conducted by your mortgage servicer. Its primary purpose is to examine the funds collected and disbursed over the past year for property taxes and insurance premiums, then project the anticipated costs for the upcoming year. This evaluation helps ensure that enough money is being held to cover these expenses.
Lenders perform these analyses to prevent shortages that could lead to unpaid taxes or lapsed insurance. The analysis also identifies any surplus funds that may have accumulated if actual expenses were lower than projected. Mortgage servicers are generally required by federal law to conduct an escrow analysis at least once annually. Homeowners often have the option to request an analysis outside of this regular schedule.
Information Needed to Request an Analysis
Before contacting your mortgage servicer to request an escrow analysis, gathering specific information will streamline the process. You will need your full name and the property address associated with the loan. Your mortgage account number is essential for identification. Additionally, having recent payment amounts or the date of your last payment can sometimes assist the servicer in locating your account details.
How to Request an Escrow Analysis
Once you have gathered the necessary information, you can proceed with requesting an escrow analysis from your mortgage servicer. Several common channels are available for submitting this request.
Contact your servicer’s customer service department by phone; the number is on your monthly mortgage statement or the servicer’s official website. Provide the information you gathered to the representative. Many servicers also offer online mortgage portals where you can submit a request electronically. Some homeowners may prefer to send a written request via mail, especially if they wish to maintain a physical record of your communication.
Understanding Your Analysis Results
Upon receiving your escrow analysis statement, understanding its components is key. This document breaks down the financial activity within your escrow account over a specified period. It provides a projection of future disbursements and explains any adjustments to your monthly payment.
The statement typically details the actual property tax and insurance premium disbursements made during the past 12 months. It also includes the projected annual disbursements for the upcoming year. You will see your account’s historical balance and how your monthly contributions compared to the actual expenses. The analysis will conclude by calculating any surplus, indicating you paid more than needed, or a shortage, meaning you paid less than required. These calculations directly influence any adjustment to your monthly escrow payment.
Steps After Reviewing Your Analysis
After you have received and carefully reviewed your escrow analysis, you may need to take further action, especially if you notice discrepancies or have lingering questions. Engaging with your mortgage servicer addresses concerns and ensures account accuracy.
If you identify figures that appear incorrect, such as an inaccurate property tax amount or an insurance premium different from your policy, contact your servicer immediately. Be prepared to provide supporting documentation, like a tax bill or an insurance declaration page, to substantiate your claim. If a resolution isn’t reached through initial contact, you may need to initiate a formal dispute process, often guided by federal regulations like the Real Estate Settlement Procedures Act (RESPA). Timely communication and documentation are essential when addressing any suspected errors in your escrow analysis.