Your monthly mortgage payment is made up of three parts: principal, interest, and escrow. In most cases, your principal and interest payment is fixed and won’t change. Your escrow payments, however, will most likely vary from year to year.
An increase in your escrow payments is most often caused by higher tax rates or insurance premiums. Additionally, increases in taxes and insurance might leave your account underfunded, causing an increase in your escrow payment to make up for the shortage.
Of course, Gregory Funding can't control the amount you are billed by your local taxing authority or your insurance carrier. There's nothing we can do to prevent changes in your escrow payment amount. But we will notify you promptly when your payment changes and take the following actions to make sure your escrow account runs smoothly:
Determine your escrow payment amount through a yearly escrow analysis
Recognize and notify you when your account has a shortage or deficiency
Recognize and notify you when your account has a surplus
It's important to note your escrow analysis is distinct from the calculation used to determine whether you have a shortage or surplus. Consequently, your payment amount may increase even if you've paid off any shortage or deficiency.
Your loan servicer requires you to pay an extra amount into your escrow account to cover unanticipated expenses. This amount is called an escrow cushion. To learn more about the escrow cushion, click here.
Gregory Funding takes pride in its commitment to keep you informed about all aspects of your mortgage account.