What Is Escrow Analysis?
Escrow Analysis: The servicer's yearly review of your escrow account, which can change your monthly payment.
An escrow analysis is a yearly review of your escrow account. The servicer compares what it collected with what it paid for taxes and insurance, and projects the next year.
Possible results
- Shortage: taxes or insurance went up, so your payment rises. You can often pay the shortage in a lump sum or spread it over 12 months.
- Surplus: if the surplus is $50 or more, the servicer must refund it, if you're current on payments.
- No change
Why your payment can rise on a fixed-rate loan
Your principal and interest stay the same, but property taxes and insurance premiums can rise, especially after the home is reassessed following your purchase.
Good to know
Check the analysis for errors, such as a tax bill that didn't include your homestead exemption.