Escrow, made simple
What it is. Why it changes. What it means for you.
What is escrow?
Think of escrow as a savings account for specific home-related expenses. Each month, part of your mortgage payment goes into this account. We use it to pay things like property taxes or home insurance premiums, so you don’t have to worry about big bills hitting all at once.
What is an escrow analysis?
Once a year, we review your account to make sure:
- You’re saving enough
- Your bills are covered
- Our monthly escrow payment stays on track
Why did my payment change?
Even if your loan didn’t change, your escrow might.
That’s because:
- Taxes can go up (or down)
- Insurance costs can change
When those costs change, your monthly payment adjusts too.
When will my payment change?
Many borrowers see a mortgage loan payment change in July. Be sure to review your statement within three days of your payment due date to confirm the new amount matches the annual escrow notice you received. If anything looks off or you have questions, give us a call at 218-625-8500 ext. 8563 — we’re happy to help.
Disclosures
Escrow account is established by a mortgage loan servicer on behalf of a borrower to pay taxes, insurance premiums (including flood insurance), or other charges. An annual escrow account statement is generally provided within 30 days of the end of the escrow account computation year, after conducting an escrow account analysis (exceptions apply). The escrow account analysis is the accounting that a servicer conducts to determine appropriate target balances, compute monthly payments for the next escrow account computation year, and determine whether shortages, surpluses or deficiencies exist. As a result of the analysis, which is often conducted annually, a borrower’s mortgage payment may change. Members Cooperative Credit Union generally has a July 1 to June 31 escrow account computation year.
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