What is escrow?

Escrow FAQs

• Will my escrow payment amount ever change?

  While the principal and interest portion of your payment is a fixed amount, your escrow payment will adjust yearly based off updated escrow figures. Every April, we will send out notification to you regarding your new escrow payment, which will go into effect in June.

• How is my escrow payment calculated?

  To calculate your escrow payment, we simply total your most recent tax and insurance payments and divide that over 12 months. If any shortage, deficiency, or surplus has occurred on the account, this will be factored into the payment as well.

• Why does my escrow payment have to be recalculated?

  Since the insurance and tax payments that are being paid from your escrow account change yearly, your payment must adjust to ensure sufficient funds are being collected.

• Does all my payment go into escrow?

  The entirety of your escrow payment goes directly into your escrow account. No interest or fees are associated with the account.

• Is there a balance that is required in the escrow account?

  Your escrow requires a two month cushion. Essentially, at the time your payment is calculated, your escrow balance must not go below this cushion based off payment projections. For example, if your monthly escrow payment is $300, the cushion required in your account would be $600.

• What is an escrow deficiency/shortgage/surplus?

  During our annual escrow analysis cycle, you may notice that your account has a deficiency, shortage, or surplus. A deficiency occurs when the escrow balance goes below zero, while a shortage occurs when the escrow balance goes below the required two month cushion. A surplus occurs when we have funds in excess of the two month cushion. As your escrow is calculated based off best estimates for the coming year, it is common for a deficiency and/or shortage or surplus to occur.

• Am I able to pay the deficiency and/or shortage in my escrow account?

  Yes, you are able to pay these items. The deficiency and/or shortage will be removed from the monthly payment if you pay these items in a lump sum. While you will still see a change in your total monthly payment from your prior year’s payment, it will be a lower payment than if you choose to pay the deficiency/shortage over your next 12 payments.

• Can I get a refund if I have a surplus in my escrow account?

  Any surplus equal to or greater than $50 will be refunded. If the surplus is less than $50, the amount will be credited against the next year’s escrow payments.

• Can I have my escrow account reanalyzed outside of the normal escrow cycle?

  To keep payment changes to a minimum and keep things simplest for both you and the Credit Union, we keep the escrow analysis cycle on an annual basis. If you would like your account and payment reanalyzed outside of the normal annual cycle, the Credit Union can review your loan upon your request. These requests should only occur if there has been a change in any of the factors making up your payment, i.e. change in insurance payment amount, change in tax payment amount, deposit to escrow account for outstanding shortage and/or deficiency, etc.

• When are my property taxes paid?

  Property taxes are paid semiannually in February and June.

• Is insurance required on my property?

  Continuous and sufficient insurance coverage is required for the life of the loan. If for any reason the Credit Union receives information that there is a lapse or insufficient insurance coverage on your property, the Credit Union will buy insurance on your behalf. The insurance the Credit Union buys may not provide as much coverage as an insurance policy you buy yourself and may be more expensive. If this insurance is placed on your loan, your escrow payment will be adjusted to account for the new insurance. Notifications will be sent out prior to insurance being force-placed onto your loan. If you do have an insurance policy in effect, simply provide documentation to the Credit Union in order to stop the force-placed insurance process.

• When is my homeowners/flood insurance paid?

  Your insurance premium will be paid annually at the renewal of your policy.