logo Login
open
What is an escrow account?
x
What is an escrow account?

An escrow is an account the bank establishes with the borrower to pay Real Estate Taxes and Insurance premiums (including flood insurance, if applicable). A portion of your monthly mortgage payment is deposited into an escrow account to make these periodic payments.

After each 12 month period, we analyze your account to help you budget your tax and insurance expenses for the upcoming year. MutualBank performs an Annual Escrow Analysis for fixed rate loans every August with October payment change. Adjustable Rate loans will analyze every 12 months effective with the rate/payment change month as disclosed in the Note.

open
What is contained in an Annual Escrow Analysis Statement?
x
What is contained in an Annual Escrow Analysis Statement?

An Annual Escrow Analysis Statement:

- Shows changes to the monthly mortgage payment.

- Estimates payment amounts for taxes and/or insurance in the next year.

- Discloses payment amounts for taxes and/or insurance since the previous escrow analysis.

- Notifies you of an escrow shortage/deficiency or surplus in the escrow account.

open
Why do escrow payments change?
x
Why do escrow payments change?

Typically, tax amounts and insurance premiums change every year. An increase in taxes or insurance may result in a higher monthly required escrow payment. In addition, the increase may create a shortage in the escrow account balance. The shortage is a portion of the increased monthly payment. Note: You may pay the shortage amount in full and request the account be reanalyzed or adjusted to reflect only the required monthly payment.

open
What is the "Projected Low Balance"?
x
What is the "Projected Low Balance"?

Projected Low Balance is the lowest balance the escrow account would reach as calculated with the current balance at the time the account is analyzed.

open
What is the "Required Low Balance"?
x
What is the "Required Low Balance"?

Required Low Balance is the lowest balance the escrow account should reach in the next 12 months. This amount cushions the account from possibly going negative when more is paid than expected. The difference between the "Projected Low Balance" and the "Required Low Balance" is a surplus or shortage.

open
What is an escrow shortage and why does it occur?
x
What is an escrow shortage and why does it occur?

An escrow shortage means that your Required Low Balance is larger than your Projected Low Balance. This is typically caused by:

- Tax and/or insurance bills during the last 12 months were higher than anticipated at the time of the previous escrow analysis.
-The anticipated payment due date for your taxes or insurance changed.
- A projected increase in taxes or insurance for the coming year.

The repayment of the shortage is divided evenly and collected over 12 months. To reduce the increase in monthly payment caused by the shortage, you may pay that amount in part or in full. Our Loan Service Department must be notified to adjust the payment if you choose to pay the shortage up front.

open
What is an escrow surplus and why does it occur?
x
What is an escrow surplus and why does it occur?

You have an escrow surplus when your Projected Low Balance is larger than your Required Low Balance. Typically, this is caused by:

- Tax and/or insurance bills during the last 12 months were lower than anticipated at the time of the previous escrow analysis.

- Your account received a refund from either the taxing authorities or insurance company.

- Additional funds were deposited into the escrow account.

 

If the surplus is less than $50, the monthly escrow payment will be reduced by 1/12 of the surplus amount. If the surplus is $50 or more, a check will be sent by the date specified on the escrow analysis statement providing the mortgage payment is current.

open
What is an escrow deficiency and how does it occur?
x
What is an escrow deficiency and how does it occur?

A deficiency means that the escrow account has a negative balance at the time of analyzing the escrow account. A deficiency typically occurs as a result of the taxes and/or insurance bills paid being substantially higher than the previous year escrow analysis projection.

open
What is an escrow analysis statement and how should I read it?
x
What is an escrow analysis statement and how should I read it?

This statement shows you the New Payment Amount and the New Payment Effective Date. It also compares the current payment with your new payment.


ESCROW REQUIRED PAYMENT represents 1/12th of the projected annual disbursements of taxes and/or insurance. It may also include PMI, Life and/or disability insurance. (NOTE: We are unable to adjust the escrow payment below the required amount.)

ADJUSTMENTS FOR SHORTAGE and/or DEFICIENCY represent 1/12th of the amount determined.

ADJUSTMENT FOR ROUNDING PAYMENT means we round the escrow payment down to allow the total new payment to be an even dollar amount.

NEW ESCROW PAYMENT is the total amount of the monthly payment that will be deposited to the escrow account.

NEW TOTAL PAYMENT is the principal and interest payment plus the new escrow payment.

open
What is the account history section and how do I read it?
x
What is the account history section and how do I read it?

The Account History shows the actual escrow account activity including the total since the last escrow analysis performed. Any estimated payments or disbursements are indicated with an "e", and also provides the anticipated total disbursements from the last analysis with which to compare.

PROJECTED ACTIVITY FOR THE COMING YEAR gives a monthly projection of the anticipated payments and disbursements out of the escrow account in the next 12 months. The payment reflected in this section is the total disbursement divided by 12. It does not include adjustments for any shortage, deficiencies, surplus, or rounding the payment.

PROJECTED ACTIVITY FROM THE PREVIOUS ANALYSIS provides a recap of the projection of payments and disbursements as disclosed on the previous escrow analysis. The payment reflected in this section is the total disbursement divided by 12 and does not include adjustments for any shortage, deficiency, surplus, or rounding of the payment.

By comparing the Projected Activity from the Previous Analysis to the actual Account History, you can see changes in tax and insurance amounts that may explain a portion of the shortage or surplus.

Page 1 of 54First   Previous   [1]  2  3  4  5  6  7  8  9  10  Next   Last   

 

 

These questions and answers are provided for general information only and may not be completely accurate in every situation. The information provided is not legally binding on MutualBank or any of its affiliates or subsidiaries. For assistance with specific questions regarding your account(s), please contact us.

ALL YOU NEED TO KNOW

Frequently Asked Questions

 

 

Back To Top

questionmark sign - Mutual BankNeed Help?