Your escrow account is what your lender uses to pay costs associated with your home, such as property taxes and homeowners insurance premiums. Part of your monthly mortgage payment is the amount the lender determines you must pay into your escrow each month to cover the costs for a year. If the lender estimates costs will go up, you'll need to put more into the escrow each month, and your monthly mortgage payment will rise. If the lender estimates costs will go down, your monthly payment decreases. Your lender typically conducts an escrow analysis each year. The analysis shows you what the lender estimates your costs will be and how your mortgage payment is going to change as a result. If you received an escrow analysis you believe is incorrect, you need to ask your lender to re-evaluate the escrow to avoid paying too much or too little into your account.
Check the escrow analysis line-by-line. Highlight any expected expense figure you believe is significantly off.
Gather proof of the need for escrow re-evaluation. For example, if your property taxes have fallen, get a copy of the most recent property tax bill and ask for an estimate of the taxes you'll pay over the next year. Contact your homeowner's insurer for a copy of the most recent premium bill and request an estimate of your next premium amount. Check the proof against the escrow analysis to confirm you're correct.
Contact the mortgage lender. You may use the main customer service number found on the bill, but check your escrow analysis to see if the lender has a separate or direct line for escrow questions first. Ask for an escrow re-analysis. Explain the differences between the current analysis and what you're actually expecting to pay. Ask if you can mail or fax proof to the lender if necessary and get the fax number or address.
Mail or fax the proof to the lender using the information the lender's representative gave you. Wait for the results to arrive.
- If you're denied a revaluation, write a letter requesting it and enclose copies of your proof. Mail the request to the lender.
- Your lender may adjust your escrow payment up if costs on your current analysis are less than what you're going to pay or the lender finds a mistake.