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In this video, we'll cover how to understand your annual escrow savings statement, which is sent out one each year. Your monthly mortgage payment is divided into two parts: P&I and T&I. P&I stands for principal and interest. This is the portion that goes toward paying down the balance of your loan and the cost of borrowing. When most people talk about a mortgage payment, this is what they’re thinking of. T&I stands for taxes and insurance. This portion of your payment goes into your escrow savings account. It’s then used to pay your property tax and insurance. The benefit of using a T&I escrow savings account allows you to break down these large payments into smaller amounts deposited throughout the year.

The reason UNCLE prepares an annual escrow savings statement is because your tax and insurance amounts" to "is because your property tax and insurance amounts. To learn about these changes, we gather information from government taxing authorities and insurance companies. This allows us to find the correct amount for your escrow account for the coming year. Your monthly escrow payment is your yearly expenses added together and divided by twelve. The escrow payment may be increased to cover a shortage or it may be reduced to return a surplus. If the combined amount of property tax and insurance payments has increased, your annual escrow savings analysis will show a shortage. This would cause your balance to drop below the minimum balance required. For your convenience, you can choose to correct this with a one-time payment, or you can repay the amount over the coming 12 months. If the combined amount of property tax and insurance has decreased, your account will have a surplus. Your balance will then be above the minimum required amount. If the surplus is fifty dollars or more, we will refund it to you. If it is less than fifty dollars, it will be applied to lower your monthly payment. The annual escrow savings analysis will also show your new monthly payment amount. Please take note of it. Certain types of recurring monthly mortgage payments may need to be updated with this new amount. If you have any other questions, please contact UNCLE and one of our team members will be happy to help.