An escrow reserve account is used to collect and “reserve” the real estate taxes and home owners insurance portion of your monthly mortgage payment for when your taxes and insurance bills are due. In Washington state, property taxes are paid twice a year and homeowners insurance is paid annually.
How Much Reserves are Required When Refinancing?
January 8, 2009 by 5 Comments
This post has been updated in 2026 to reflect current practices for Washington State refinances.
A common question I get from refinance clients: why does one lender’s Loan Estimate show more “reserves” due at closing than another lender’s estimate for the same loan? It usually isn’t that one lender is more expensive — it’s that one estimate is more accurate about timing. [Read more…]
Why Is My Payoff Higher Than The Principal Balance?
February 12, 2007 by 2 Comments
I am often asked this question during a refinance from homeowners.
Your mortgage payment is paid in arrears. For example, your February payment is paying January’s interest. Remember when you bought or refinanced your home and the loan originator stated, “you’re going to skip one month’s payment” or “you won’t have another payment due until the following month after closing”? Well, this is where that payment essentially catches up with you. (Technically, it’s not “that” payment, you’re just always paying the previous month’s interest).
Can I Pay My Own Taxes and Insurance? | Mortgage Escrow Reserve Account Guide
February 8, 2007 by 2 Comments
If you’ve ever looked at your mortgage payment and wondered why taxes and insurance are bundled in, you’re not alone. Many homebuyers ask whether they can simply pay those bills themselves — and the answer depends on how much equity you have and what your lender requires. [Read more…]
