What is an escrow analysis?
After the dust settles and your boxes are unpacked in your new home, you may be reading the fine print on your escrow contract and notice a question bubbling up, “What is an escrow analysis?” It’s an important term to be aware of before, during, and after a real estate transaction. We are greater South Bay’s favorite escrow company, and we’re always happy to answer your questions about anything escrow-related. We have been serving this area since 1985, and we relish every opportunity to put our expertise to work for you. Now, let’s turn our focus to the issue currently at hand.
What is an escrow analysis?
An escrow analysis is a review that’s conducted once a year, the goal of which is to make sure that you always have enough money in your escrow account. Payment for each of the items in your escrow account is due at different times of the year – in fact, some insurances are only paid once every 3 years, which complicates the calculation considerably. To avoid having a negative balance in your escrow account, your lender or escrow holder will employ various strategies. In many cases, the escrow agent will have you make an extra 2 months of escrow payments to your escrow account, which will serve as a cushion, if the agent predicts that your account will be low one or more months in the next 12-month period.
If you’d like, you can request an escrow analysis at any time, though traditionally, they are conducted once per year.
What if the escrow analysis finds a shortage or surplus?
Once the escrow analysis has been completed, you may find out that you have a shortage or surplus in your escrow account. This occurs when there’s been an increase or decrease in your property taxes because of changes in your property value. If you have a surplus, then you’ll receive an escrow check, but if there’s a shortage, your escrow payment amounts will increase until it’s paid off. Your new monthly escrow payment will be recalculated to take into account the higher taxes and/or insurance premiums.
What other escrow questions do you have?
Is this your first time buying real estate? Do you have other escrow-related questions? Don’t be shy about reaching out! We’d be happy to answer your questions and put our expertise to work for you. We are greater South Bay’s favorite escrow company – and we look forward to meeting all your escrow needs. We wish you a very smooth, stress-free real estate transaction – and we can make it happen when you choose to partner with Neighborhood Escrow. You can count on us to provide you with accurate information, honest advice, and utmost respect every time you interact with anyone on our team.
Get in touch! We can be reached by phone at 310-378-2456 or email at debbie@neighborhoodescrow.com.
