Mortgage statements may differ in format, depending on the lender, but they all contain a number of lines indicating how the overall payment breaks down. These categories include principal and interest, escrow balance and taxes paid, among others. The T&I balance is one of these categories, and it reflects the escrow account balance compared with the amount paid for taxes and homeowners insurance.
The T&I balance on your mortgage statement relates to the balance in your escrow account used to pay for property taxes, homeowners insurance and possibly private mortgage insurance. Transactions occur in that account as the lender collects and uses funds to pay your tax and insurance bills as they come due.
Taxes and Insurance
Many monthly mortgage payments include an amount designed to cover property taxes and homeowners insurance. A portion of each month's payment by the homeowner is set aside until a quarterly or annual tax or insurance bill is due, then the lender issues a check to the municipality – for taxes – or the insurer -- for coverage. If the homeowner pays the tax or insurance bill separately, it would not be included in the monthly mortgage payment.
Your Escrow Account
An escrow account is the account in which the lender stores the monthly tax and insurance payments for future use when the bills come due. This special account, with its separate balance from the principal, allows both lender and homeowner to remain aware of what has been paid in by the homeowner for taxes and insurance, as well as the actual amount paid out by the lender.
T&I on the Mortgage Statement
The T&I balance on the mortgage statement includes the amount paid into the escrow account, the amount paid out by the lender and what is left over in the account. This may also be called the escrow balance. At the end of the year, the lender may issue a check or carry over the balance if there is money left over. On the other hand, it may request an additional payment from the homeowner if it paid out over the course of the year more than the total of what it took in monthly.
Private Mortgage Insurance
Private mortgage insurance is a lender-mandated form of insurance that covers the lender if you default. Usually, homebuyers who put down less than 20 percent of the sales price when they make the purchase are required by the mortgage company to buy the coverage. This can mean an additional $50 to $200 per month on the bill. PMI may be included in the T&I information, or it may be listed separately from the T&I information, depending on how the lender sets up the statement.