Why does my home loan include an escrow account

Many loans require an escrow account to help guarantee your taxes and insurance payments are always made on time, and that your insurance coverage is adequate. Escrow accounts also enable us to offer you competitive rates, as the possibility of your home’s taxes or insurance becoming delinquent is reduced.

Other advantages of having an escrow account include:

  • Easier, month-to-month payments toward your annual property taxes and insurance premiums. Instead of having to produce the entire payment when due, an escrow account only requires you to pay 1/12 of these costs each month, plus any cushion amount required on your loan.
  • You won’t have to pay these yourself, as Caliber will take care of this for you.

Why Does My Home Loan Include an Escrow Account?

Many loans require an escrow account to help guarantee your taxes and insurance payments are always made on time, and that your insurance coverage is adequate. Escrow accounts also enable us to offer you competitive rates, as the possibility of your home’s taxes or insurance becoming delinquent is reduced.

Other advantages of having an escrow account include:

  • Easier, month-to-month payments toward your annual property taxes and insurance premiums. Instead of having to produce the entire payment when due, an escrow account only requires you to pay 1/12 of these costs each month, plus any cushion amount required on your loan.
  • You won’t have to pay these yourself, as Caliber will take care of this for you.
What Bills Are Covered by My Escrow Account?

Typically, the funds in an escrow account pay:

  • Property taxes
  • Homeowners/Hazard insurance premiums
  • Mortgage insurance premiums if required
  • Flood insurance premiums if required
  • Condo unit owners’ insurance if required

An escrow account doesn’t pay:

  • Interim tax bills, supplemental tax assessments, or any other fees that are not included in your property tax bill
  • Homeowners’ Association (HOA) fees
  • Premiums for coverage such as personal property insurance
  • Utility bills
I Received a Check from Caliber Home Loans Because My Escrow Account Had a Surplus. I’d Rather Put These Funds Back into My Escrow Account. How Can I Do This?

For the fastest service, deposit your escrow surplus check into your own account and add funds to your escrow account when making your next monthly payment. We do not advise that you endorse the check and return it to Caliber, since this incurs risk if the check is lost or stolen before it arrives at our offices.

I Just Reviewed My Escrow Statement. It Has More Funds than Required to Pay the Escrowed Items. Why Do I Need to Keep Spare Funds in My Escrow Account?

When managing an escrow account, Caliber maintains a “cushion” of extra funds to cover any increases in your insurance, tax or other premiums associated with the account. These extra funds are usually equal to two months’ monthly premiums, and help prevent unforeseen shortages in your escrow account.

For example, if your annual homeowner’s insurance premium is $2,000, we would maintain a cushion equal to around $334. Here’s how we calculated this cushion: $2,000 ÷ 12 months = $166.67. Two extra months of escrow “cushion” contributions would equal $333.33.

 

I Would Rather Pay My Annual Taxes and Insurance Premiums Myself. Can I Close My Escrow Account?

To request that we cancel your escrow account, print and complete the Escrow Removal Authorization Form and return to: Caliber Home Loans, Inc., Att: Escrow Department, P.O. Box 268, Springfield, Ohio 45501. Be sure to include your loan account number and the signatures of all borrowers on your loan to ensure prompt processing. Please allow 30 days from the date of our receipt to receive a response letter from us.

My Loan Doesn’t Have an Escrow Account, but I Would Prefer to Manage My Taxes and Insurance with One. How Can I Ask for Escrows to Be Added to My Loan?

To add escrow, please sign and return an Escrow Agreement Letter to Caliber Home Loans, Inc., Att: Escrow Department, P.O. Box 268, Springfield, Ohio 45501.

Requests take about 45 days to process. Once approved, we will inform you of your monthly escrow payments by mailing you an Escrow Analysis Statement.

How Often Do You Review My Escrow Account?

We review your escrow account at least once a year, although we will perform a second review if:

  • Your property taxes and/or insurance policy premiums change
  • We have recently acquired your loan
  • You request an off cycle analysis
What Happens to My Escrow Funds If I Pay off My Loan Early?

If you have surplus funds in your escrow account, they will be refunded directly to you by mail. Please allow 30 days for your check to arrive.

I’ve Just Received an Escrow Analysis Letter from Caliber Telling Me That My Monthly Escrow Payments Are Increasing. What Caused This?

Generally, an increase in your monthly escrow payments are the result of increased property taxes or insurance premiums. Please refer to Section 3 (Escrow Account History) of your Escrow Analysis statement for details.

What will happen to my escrow funds when I refinance with Caliber?

You will be given two options for disbursing these funds during the processing of your new loan. We’ll ask you if you prefer to “net your escrows” or receive a refund after closing. Here are details of each option.

Net your escrows: If you choose this, we will apply the balance of your escrow account toward the payoff of your existing loan. This may reduce the amount of funds needed to close your new refinance OR increase the amount of cash (proceeds) you will receive at closing.
Escrow refunds: If you do not want to net your escrows during refinancing, the payoff of your existing loan will not be reduced and we’ll issue a check for your escrow balance and mail it to you within 4-6 weeks after your Caliber refinance closes.

Can my current escrow account be transferred to my new loan during refinancing?

No. We are required to set up a new escrow account for your new loan.

How do I know if my loan is escrowed?
  1. Log in to your account to view the Accounts Detail page
  2. Under the header, 'Paid Year to Date' click on the 'Escrow' link

If your loan is escrowed, you will see the breakdown of your tax and/or insurance information. If your loan is non-escrowed, 'No Escrow Found' will display.

Why was my loan analyzed more than once this year?

Your loan can be analyzed more than once on an annual basis. Below are several examples of reasons why this may occur:

  1. Caliber recently acquired your loan
  2. Anniversary of your loan's closing
  3. State analysis
  4. Change in your annual tax and/or insurance amounts or due dates
  5. Shortage spread extension request
  6. Escrow was added to your loan
  7. A tax or insurance refund was received
  8. Completion of a loan modification
  9. Your loan was reinstated

Still Have Questions?

Call Caliber Servicing at 800-401-6587.
Our friendly Customer Service representatives are ready to assist you
from 8:00 AM to 7:00 PM CST, Monday through Friday.

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