Here is something you might see on your own kitchen table…your mortgage company sends you an escrow adjustment statement. This most often is the result of you receiving a check back from your mortgage company the previous month…your reaction is usually, “oh a check…free money…woooop!”
The scenario goes, you deposit it and next month you get this statement…you don’t read it…your next mortgage bill comes in and it’s $90 more than usual…yo…u call your mortgage company to find out why…they tell you it’s due to your home insurance going up…and that is false information to get you off the phone. Then you call us explaining the mortgage company says your home insurance went up $90 a month. Well…it didn’t.
We see this scenario play out at least once a week and the story is the same…you cashed a check after the mortgage company’s escrow “analysis”.
My company does the same thing every year…they send me a check…I deposit the check and send it back to escrow earmarked as “additional escrow” on the statement. Homeowners insurance tweaks up a bit each year, but not as much as taxes usually do.
Sending this money back will keep you out of trouble and prevent your mortgage payment from going up due to “free money”…don’t fall for it! Always ask questions when money comes back…it came from somewhere…and someone will want it back!
No mortgage company call-center employee is going to explain this to you…ever.