Knowledge is power, especially when it comes to your financial well-being. While your escrow account is often “out of sight, out of mind,” your lender is still legally required to provide an annual escrow statement each year. Take the time to review it carefully; this document gives you the big picture of where your hard-earned money goes each month. What information must be included within an annual escrow statement?

An escrow account acts as a shared account between you and your lender. Every month, a portion of your mortgage payment is deposited into your escrow account. Your lender will pay your home insurance premiums and property taxes from this account. The benefit of this is twofold; your lender ensures that the insurance for the property never lapses and that you don’t become delinquent on your property taxes (which protects their investment), while you consolidate the payments you have to make, adding convenience and saving you from an extra bill to remember.

Like any other checking or savings account, you will receive an annual escrow statement from your lender. While annual escrow statements will vary from lender to lender, all must include:

• An itemized list of the monthly mortgage payment over the last year and the amount that was taken out each month for deposit into the escrow account
• A record of payments paid out of the escrow account for the past year, including dates and amounts for property taxes and insurance premiums
• The end-of-year balance of the escrow account
• A projection for the next year’s monthly mortgage payments and amount that will be deposited into the escrow account
• A projection for the next year’s payments that will be paid out of the escrow account for property taxes and insurance premiums
• The projected end-of-year balance for the next year in the escrow account
• An explanation of how excess money in the escrow account will be distributed to the borrower
• Instructions for how the borrower will pay an increased payment if the low monthly balance is not met, usually by adjusting the monthly mortgage payment to cover the difference

Have questions about your annual escrow statement? Contact Clear Title, LLC at one of our northwestern Florida offices, or visit us at ClearTitleNWFL.com

Pensacola: (850) 361-4029

Pace: (850) 994-3838

Pine Forest: (850) 202-8518