Each year, we review your escrow account to ensure that the amount set aside with your monthly mortgage payment is sufficient to cover your property taxes. Please take the time to carefully review your escrow analysis. This document presents the results of our review and indicates whether your payment needs to be adjusted. For more details, please refer to this Escrow Analysis Guide and the FAQs below.
What is an escrow analysis statement?
An escrow analysis statement is a yearly report that details how your mortgage lender, in this case Milford Federal Bank, manages your escrow account. This statement summarizes the previous year’s escrow activity, projects expenses for the next year, and explains any changes to your monthly mortgage payment. It essentially ensures there are sufficient funds in your escrow account to cover property taxes, and any other expenses received, such as unpaid water and sewer.
Why is an escrow analysis necessary?
An escrow analysis is necessary to ensure that the funds held in your escrow account are sufficient to cover your property taxes, as well as to adjust your monthly mortgage payments accordingly. This annual review helps prevent unexpected shortages or surpluses in your escrow account, which could lead to increased or decreased mortgage payments.
How are my payments calculated?
Escrow payments are calculated by estimating your annual property taxes, dividing that total by 12 (the number of months in a year), and then adding this amount to your monthly mortgage payment. Milford Federal Bank will also include a cushion, 2 months’ worth of payments, to account for potential fluctuations in taxes.
Why did my payment change?
A payment change during escrow analysis is usually due to adjustments in property taxes, which are paid through the escrow account. If this cost increases, your monthly mortgage payment will likely increase to cover the higher expenses. Conversely, if the cost decreases, your payment may decrease. Please note that Milford Federal does not set the amounts for your taxes. For information regarding your tax amounts, please contact your local tax authority.
If you have questions about your escrow analysis, please call us at 800-478-6990 x1560.
