Homeowner Blunders - Escrow Account Shortage

If you don’t have an escrow account, keep scrolling.

If you’d like to avoid an unpleasant surprise early in the new year, do this quick check on your escrow account today. The sooner you do it, the more time you will have to come up with a plan for how to deal with a possible shortage.

Why a shortage? Because insurance and taxes may have increased during the year, but your payment towards your escrow account did not.

This example is based on a new construction purchase that I made in June 2023. The county valued the property as a lot in 2023 and taxes were $361. In August 2024 I found out what the new value would be and my taxes increased to $5,751! I was expecting the increase and have planned for it.

Many homeowners do not check on this and end up with a shockingly higher payment during the second year of ownership. The happens regularly with new construction. The recent significant increases in insurance costs could cause this to happen to more people than ever this year.

Find out whether you are going to have a shortage today and make a plan to be able to cover it before your mortgage company does it for you. Otherwise, you can expect a super sized increase to your mortgage payment next year.

Need help figuring this out? Comment HELP and I’ll be in touch!

Cristina Valdés, Broker Associate
Corazón Team | Compass
512-843-3572

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