If the money in your escrow account is projected to be below your minimum balance at its lowest point in the 12-month period, you have a shortage. This can happen if the taxes or insurance premiums for the previous 12 months were more than expected. Or, if they're estimated to go up in the next 12 months. Your escrow shortage will be automatically spread over a term of at least 12 months. Your escrow disclosure statement will provide the details of that shortage and any additional information as necessary. 
Equal Housing Lender
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.
If your escrow account is projected to have more than the minimum balance required at its lowest point in the 12-month period, you have an overage. This happens if the taxes or insurance premiums for the previous 12 months were less than expected. Or, if they're estimated to go down in the next 12 months. In most cases, we’ll send you a refund check for that amount.
Equal Housing Lender
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.
Part 1 of your escrow statement has your payment information. It has your current payment amount and your new payment amount. If you have a shortageIf you have a shortage, a portion of the amount will be added to each monthly payment. In most cases, if you have an overage you'll have a refund check attached to the bottom of this section.
Equal Housing Lender
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.
We review your escrow account every year. After each review, we send you a statement that details any changes to your account, any shortages or overages you may have, and your account activity.
Equal Housing Lender
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.
[Music] Wondering how we determine the amount you'll pay into escrow? You've come to the right place! Here's how we do it. When you close on your mortgage, your escrow account is set up, and we calculate three things for it: property taxes, insurance premiums for your home, and the minimum balance you need to keep in your account. How do we get those amounts? First, we estimate the amount you'll owe for your property taxes, homeowners insurance and other expenses you might have, like mortgage insurance and flood insurance, over the next 12 months. We get this number from your loan closing documents, local property tax office and insurance company. For example, say your yearly property taxes are estimated to be $3,000 and your yearly homeowners insurance, $1,200. That's a total of $4,200 for the coming year. We divide that by 12 and there's the escrow portion of your total monthly mortgage payment: $350. Then, we add that to the mortgage portion so you have one combined payment where part of it goes toward your mortgage principal and interest and the other part goes into your escrow account to pay your property taxes and insurance premiums for your home. This way you're setting aside money for escrow each time you make your monthly mortgage payment. Next, we calculate your minimum balance. Did you know that even if you have a fixed rate mortgage, your total payment can change from year to year? This is because property tax amounts and insurance premiums for your home can, and often do, change year after year. To help you plan for any potential increases, a minimum balance needs to be kept in your account at all times. It can be up to two months of escrow payments. We'll keep you updated and let you know about any changes to these amounts when we review your escrow account each year. Now you know how we determine your escrow amount. If you have any questions, we're here for you. Give us a call at 1-800-357-6675. Or, you can check out our other videos to learn more about your mortgage. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. [Music]
It’s an easy way to manage property taxes and insurance premiums for your home. You don’t have to save for them separately because you make one monthly payment where:
When those bills are due, we use the funds in your escrow account to pay them. Watch our videos to learn how escrow works. Don't worry about sending us your tax or insurance bills – we usually get a copy from your local property tax office and insurance company. If we do need you to send one to us, we’ll let you know.
Property taxes are based on land value at first. They go up when your home’s value is taxed too. To plan, put extra money towards escrow early on. Call us to learn more. Yearly escrow reviewProperty taxes and insurance premiums change over time. We review your escrow account each year to make sure you’ll have enough to cover these expenses. To help with any unexpected increases, you need to keep a minimum balance in your account at all times. It's calculated to not be more than 2 months of escrow payments. During the escrow account review, we figure out how much will be in your account each month for the next 12 months. At its lowest point, if it’s projected to be: We’ll send you a statement after each review to let you know of any changes to your account.
Take a tour of a sample escrow statement and learn what information you'll find in each section. Start now Additional ResourcesFor information on your specific property taxes or insurance costs, contact your local property tax office or your insurance company.
Equal Housing Lender
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.
An account you fund each month as part of your total monthly payment. We use it to make property tax and insurance payments for you. Items like mortgage insurance and flood insurance may also get paid from the account. Read more about how escrow accounts work or watch a video about it.
Most of the time, escrow accounts are required if your down payment was less than 20%. There are benefits to having an escrow account, even if it isn’t required. It helps you manage large expenses like property taxes and insurance premiums so you don’t have to save for them separately. You make 1 combined mortgage and escrow payment each month and we deposit a portion into your escrow account. When your property tax and insurance bills are due, we pay them on your behalf.
If you don't have an escrow account with us and want to open one, we'd be happy to help you. Please call us at: Central Time
We pay interest on escrow in certain states. We do this in accordance with the Real Estate Settlement Procedures Act (RESPA) and applicable state laws.
Sometimes taxes and insurance are higher than expected. To be prepared, you're required to keep a minimum balance in your account at all times. This helps make sure any unexpected increases are covered. Your minimum balance varies by state but is calculated to not be more than 2 months of escrow payments. Learn more about how escrow accounts work.
The money in your escrow account pays:
Learn more about these types of insurance. It doesn’t pay:
You’ll pay these separately.
We:
Watch a video about how escrow is calculated.
Sign on to your mortgage account online and select the Escrow Details link to see the most recent amounts paid for your property taxes and insurance premiums. Keep in mind that these amounts reflect payments we've already made. If they don't match your most recent tax and insurance bills, it's because we haven’t paid those yet.
We review your escrow account at least once a year. If you want us to recalculate your payments sooner, please contact us. We can review your account ahead of schedule, as long as it’s at least 60 days before your next yearly review. The payments you made at closing were for your initial deposit or for bills that were due immediately. You'll put funds into escrow each month for future property taxes and insurance premiums.
If you've set up automatic mortgage payments with:
No. We usually get them from your local property tax office and insurance company. We'll let you know if we need you to send the bills to us.
Each year, we review your account to make sure the escrow portion of your total monthly payment covers your property taxes and insurance premiums, while also maintaining the minimum balance your account must have. Changes to your property taxes and insurance premiums may cause your monthly payment to change. We’ll send you an escrow statement after each review (some exceptions apply based on your account status). Learn more about your yearly escrow review.
If the funds in your escrow account are projected to be below your minimum balance at the lowest point in the 12-month period, you have a shortage. This can happen if the taxes or insurance premiums for the previous 12 months were more than expected. Or, if they're estimated to go up in the next 12 months. Your escrow shortage will be automatically spread over a term of at least 12 months. Your escrow disclosure statement will provide the details of that shortage and any additional information as necessary. We’ll send you an escrow statement after each review that details all of this.
If your escrow account is projected to have more than the minimum balance required at its lowest point in the 12-month period, you have an overage. This happens if the taxes or insurance premiums for the previous 12 months were less than expected. Or, if they're estimated to go down in the next 12 months. In most cases, we’ll send you a refund check for that amount.
Equal Housing Lender
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. |
How to cancel escrow account with Wells Fargo
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