promotion image of download ymail app
Promoted

what is an escrow balance?

i recently baught a home and my monthly morgage statements has a principle balance and an escrow balace.... is it good to have a negative balance, positive, or 0.? please help. FIRST TIME BUYER!

17 Answers

Relevance
  • 1 decade ago
    Favorite Answer

    The institution that holds your mortgage wants to ensure that you are paying the taxes/insurance/other non-mortgage expenses on the house. So, they estimate what the total costs are for these elements and divide that cost over the payment schedule for a year, adding the cost to each payment.

    For example, if the bank wanted to ensure that you paid your land taxes and those taxes were $12,000 for the year, they would add $1000 per month (assuming a monthly payment schedule) to your mortgage payment. When the tax bill comes due, the bank would pay the bill from your escrow account.

    Generally speaking, there's no 'good' or 'bad' escrow balance, it merely represents how much the bank is holding (in escrow) to pay off planned liabilities against the property. Money in your escrow account does accrue normal interest, like any savings account.

    • Commenter avatarLogin to reply the answers
  • lesch
    Lv 4
    4 years ago

    Escrow Balance

    • Commenter avatarLogin to reply the answers
  • bible
    Lv 4
    4 years ago

    Define Escrow

    • Commenter avatarLogin to reply the answers
  • 6 years ago

    It's always good to have a positive or 0 balance in escrow. Negative means you owe and the mortgage company will make an adjustment where your monthly amount for taxes and insurance will be higher to help cover the cost you are behind

    • Un Ki3 years agoReport

      it shows my mortgage loan statement escrow balance $ 6,358.00 ? is the money I owe or is my money setting there to pay tax and insurance?

    • Commenter avatarLogin to reply the answers
  • How do you think about the answers? You can sign in to vote the answer.
  • 1 decade ago

    the escrow balance is the amount of money that the mortgage company is holding to pay your property taxes, homeowners insurance, and/or mortgage insurance. you contribute 1/12 of the cost each month and when the bill comes due your mtg company pays it for you. A negative balance is not good but don't worry, your company will adjust it so that in a year your account will balance. If you have more money in the account than the state (or federal) set maximum (like 2 months PITI or something)you will get a refund check at some point/

    Source(s): I'm a mortgage banker
    • Commenter avatarLogin to reply the answers
  • 1 decade ago

    Yoy should always have a + escrow or 0 ! An escrow is a set aside account for paying insurance or taxes as they become due ! A portion of your monthly payment is placed into this account to cover these items !! Saves you from personally having to remember to pay them !!

    • Commenter avatarLogin to reply the answers
  • 5 years ago

    I m with CHASE bank.

    This is the second consecutive year that I need to pay a balance of more than 1000.00 in April or my monthly payments will increase. Last year, the bank said that it was because of an increase of the fees for my home insurance. This year, they re saying because I had a negative escrow and not because of my home insurance because I ve already call them. Is this legal? Can that happen?

    Lucy

    • Commenter avatarLogin to reply the answers
  • 1 decade ago

    your going to want money in your escrow account, especially if that is how your paying your taxes, but not to worry even if it is 0 with time it will increase. I just bought my first house 2 months ago, and i started out with a balance..it pays school, and property and home owners insurance.

    • Commenter avatarLogin to reply the answers
  • Audy
    Lv 6
    4 years ago

    For Credit and finance solutions I recommend this website where you can find all the solutions. http://personalcreditsolutions.info/index.html?src...

    RE :What is an escrow balance?

    i recently baught a home and my monthly morgage statements has a principle balance and an escrow balace.... is it good to have a negative balance, positive, or 0.? please help. FIRST TIME BUYER!

    8 following 14 answers

    Source(s): For Credit and finance solutions I recommend this website where you can find all the solutions. http://personalcreditsolutions.info/index.html?src...
    • Commenter avatarLogin to reply the answers
  • Anonymous
    5 years ago

    This Site Might Help You.

    RE:

    what is an escrow balance?

    i recently baught a home and my monthly morgage statements has a principle balance and an escrow balace.... is it good to have a negative balance, positive, or 0.? please help. FIRST TIME BUYER!

    Source(s): escrow balance: https://tr.im/UxKrU
    • Commenter avatarLogin to reply the answers
Still have questions? Get your answers by asking now.