Frequently Asked Questions Topic:

Home Loans

An escrow account allows us to pay the required insurance and/or taxes on your property for you. You pay a portion of your taxes and/or insurance premiums as part of your monthly mortgage payment. Then, when taxes and/or premiums are due, we’ll pay them on your behalf with the money in your escrow account.

An escrow account helps you budget for large expenses, like property taxes and insurance. Plus, we pay them on your behalf when they're due, which saves you time and gives you peace of mind that your payments will be made on time.

Each year we project how much you’ll need in your escrow account for the upcoming year. We base it on the amount of taxes and/or insurance you paid during the past 12 months. The total paid is divided by 12 to get your projected monthly escrow payment.

Annually, your payment must be adjusted to ensure your monthly balance remains above a required minimum balance, which is 2 months of escrow payments, for the next 12 months.

We estimated your tax payments and/or insurance premiums before your loan closed using the most recent tax and/or insurance amounts paid on the property. If your home is newly constructed, we may base our estimate on the taxes you paid for the property before you made any improvements.

We have to project your tax and/or insurance premiums based on the amounts you paid in the previous year, unless we receive official notice of an amount change for the upcoming year from a taxing authority or insurance provider.

Every year in October, we review your escrow account to make sure there’s enough money in it to cover your taxes and/or insurance premiums. We send you a summary statement of this report, called an escrow analysis. It includes a review of activity in your escrow account during the past 12 months, with projections for the next 12 months.

This helps us determine the amount you need to pay into your escrow account each month, so we can pay your taxes and/or insurance expenses on your behalf for the next 12 months.

There are 3 pages to your annual analysis:

• Page 1 is the Annual Projection Statement dated for this year: what we are anticipating for the upcoming year.
• Page 2 is the Annual History Statement: what was actually paid out and collected in last 12 months or since the last analysis.
• Page 3 is the Annual Projection Statement from the previous year’s analysis OR the Initial Projection Statement if your escrow was established after that time. This is what we anticipated we would need the year previously.

A shortage occurs when the escrow account balance at its projected lowest point for the next 12 months is below the required minimum balance, which is 2 months of payments. It helps to protect you, so you have enough funds in the account to cover an unexpected tax and/or insurance increase.

A deficiency occurs when the escrow currently has a negative balance, so funds need to be collected to reimburse the account.

If your taxes and/or insurance costs were lower than expected, your account may have a surplus. If the surplus is $50 or more, a surplus check will be sent around the same time but typically separately from your Annual Escrow Analysis. These are your funds. For surpluses less than $50, your money will be left in your escrow account.

There are a few reasons why you might not have enough money in your escrow account to meet the minimum balance:

• Your property taxes and/or insurance premiums increased.
• The due date of your insurance premiums changed.
• You made fewer escrow payments into your account than expected.
• Your starting escrow balance for the 12-month period was lower than expected due to higher payouts the prior year.

If you have questions about an increase in your property taxes or insurance premiums, please contact your local taxing authority or insurance agent.

Option 1: Pay nothing and spread the shortage amount evenly across next year’s payments.

Option 2: Pay the full shortage prior to December 1. Please note, if your tax and/or insurance expenses have increased, your monthly mortgage payment may still go up, even if you pay all of the shortage. Your new payment will be effective for December as stated on the analysis.

If you have questions regarding these options, please contact us so we can assist you.

You may make a transfer from an internal account, bring the funds to a local branch, or mail a check with your loan information to apply the funds to your escrow. For more detailed instructions please contact us.

You may not be able to prevent a shortage, but you can minimize the impact by staying informed about your escrow account. You can sign in to your I-banking and see what payments were made in your loan history and compare it to what we projected in your Annual Escrow Analysis. You should also be receiving statements annually from the county regarding taxes and from your homeowner’s insurance.

If it’s higher than projected, you can make an additional escrow payment to help lower or prevent a shortage, but the analysis will continue to be run annually in October.

The new amount will go into effect with the December payment.

If it is in regard to how your taxes have been assessed, please contact your local treasurer’s office. If you have questions on the details of your payment, please contact us so we can assist you.

Whether you have an escrow account with us or not, we do not need a copy. That is for your records only.

Please contact us so we can assist you.

Please contact us so we can assist you.

Please contact us as soon as possible. including your name, address and loan number, along with the new policy information.

You may receive a refund if you are switching in the middle of the policy term from the provider you are cancelling with. It is in your best interest to make sure the refund is brought in and deposited to your escrow account to avoid a shortage at annual analysis.

Please contact us so we can assist you.

If your payment has changed during escrow analysis, you may need to update the amount due. Locate the method below that you use to make your monthly payment and follow the included instructions.

1. You authorized FSB to pull your payment via an Auto-Payment form

• No action is needed as the transfer will adjust to the new monthly amount

2. You set up your own automatic payment transfers through FSB I-Banking

• You will need to log in and adjust the payment to ensure you are covering the amount due
• Follow these instructions to change your payment amount

3. You pay as you go either by check or an online transfer

• ‍‍Ensure you are referencing the Total Amount Due on the Annual Escrow Analysis letter you received in the mail for the correct payment amount

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Unsure which way you have set up your autopayment? Verify through FSB I-Banking:

• Log in to your FSB I-banking account
• Click on Money Movement > Online Activity Center
• Select "Recurring" tab.
• If any of the active recurring transactions are your mortgage payment, refer to #2 above.