Escrow Analysis
An escrow analysis is an annual review performed by your mortgage servicer to ensure your escrow account is collecting the correct amount to cover upcoming property tax and insurance payments.
If taxes or insurance costs have increased, the analysis may result in a higher monthly payment to make up the difference. If costs have decreased or the account has a surplus, your payment may go down or you may receive a refund.
An escrow analysis is not a rate change or a penalty. It is a routine recalculation required by federal law to keep your account properly funded. Payment changes resulting from an escrow analysis are separate from any changes to your interest rate. Learn more in our guide to understanding your escrow account.
Why This Matters: Escrow analysis is the most common reason your mortgage payment changes from year to year. Understanding when it happens and why prepares you for adjustments and prevents confusion.
Common question
How often does my servicer do an escrow analysis?
Servicers perform an annual escrow analysis to ensure the account will cover upcoming tax and insurance bills. You will receive a notice explaining any payment change.
Why did my mortgage payment go up?
If taxes or insurance increased, the escrow analysis will raise your monthly payment to cover the shortfall. This is a routine adjustment, not a rate change or penalty.
Related Topics
Related Mortgage Terms
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