Escrow Account Frequently Asked Questions
Let us help answer your questions about escrow accounts.
What is an escrow account?
An escrow account is an account created for the borrower that is used to pay any property taxes, homeowner’s insurance and/or flood insurance (if applicable). As each mortgage payment is made, a dedicated portion is added to the escrow account to pay taxes and/or insurance.
Why do I need to have an escrow account?
Escrow accounts are a great way to help budget for tax and insurance payments required for your home. M&T does the work for you by tracking all of the required payments – ensuring your tax and insurance payments are made on time. This service saves the cost of postage and, most importantly, your time.
Certain government agency loans require the establishment of an escrow account. If this is true for your loan, your loan documents signed at loan origination will indicate this requirement.
Can I close my escrow account, or pay my tax or insurance bill myself?
If an escrow account was established as a condition of your mortgage, or later added to pay past due taxes/insurance on your behalf, removal of escrow would not be permitted.
Where can I find more information about my escrow account?
Your monthly billing statement reflects all escrow activity. This allows you to monitor all activity on your account. Log in to M&T Online Banking to see what bills are being paid from your escrow account and all other online activity.
Does M&T pay interest on my escrow account?
If the account is interest bearing, that activity would be reflected on your Monthly Billing Statements and Year End statement.
What is an escrow reserve?
An escrow reserve, also known as a cushion, is the amount of money collected in the escrow to cover any unanticipated increases in your real estate or insurance premium payment. It acts like a buffer and helps to prevent your escrow account from being overdrawn. All escrow accounts have a reserve unless otherwise indicated by your mortgage documents or state law.
What bills are paid from an escrow account?
- Property Taxes
- Homeowner’s Insurance
- Additional Insurances (flood, wind if applicable)
- Any other property bills sent to M&T (evaluated on an individual basis)
How is my escrow payment determined?
The calculation used to determine your monthly escrow amount is: 12 months of payments+ minimum required balance / 12 = Monthly Escrow payment
We gather the anticipated amount to be paid in the next 12-month time frame from when the escrow analysis was performed. These payments may either be known, based on the prior year’s payments, or based on payments of similar residential properties. We forecast any anticipated increase or decrease and factor in any existing escrow account balance. We collect 1/12th of this amount monthly.
Where can I view my estimated tax and insurance amounts?
Log in to M&T Online Banking to view your most recent tax and insurance amounts. You can also find this information on your monthly billing statement under escrow activity.
Why didn't my payment amount go down when my taxes or insurance did?
Payments from your escrow account are determined on a yearly basis. Changes in taxes/insurance may not be accounted for until it is time for the next escrow analysis. If you have documentation that shows a change in your taxes or insurance, please email it to email@example.com.
Why are you collecting funds when I paid my taxes and insurance premiums at closing?
The funds paid at the end of closing were collected for taxes and insurance premiums currently due. The escrow account funds are meant to pay for all future tax and insurance premiums as they are due.
If my escrow analysis results in a monthly payment change and I have automatic payments setup will they get adjusted?
If you have enrolled in M&T automated payments, you do not need to take further action. Your payment will adjust to the new amounts. If you have set up your payments with a third-party bill pay service or are transferring funds periodically from your M&T checking/savings account, you’ll need to adjust your payments to reflect the new payment amount.
Do I need to send my tax and insurance bills each time they're due?
M&T receives the tax information directly from your municipality. Unless requested, you do not need to send them in. Tax bills are typically paid two to three weeks prior to the due date. If you want a supplemental, interim, or added assessment tax bill paid by us, you will need to forward it to firstname.lastname@example.org.
M&T receives insurance information directly from your carrier. However, if you change insurance carriers please go to MyCoverageInfo to update your insurance information.
Yearly Escrow Review
Why did my escrow payment go up?
Your payment may have increased for several reasons. Some of the most common reasons are:
- Increases in your property taxes and/or insurance premiums
- Increases in your property’s tax assessment
- Changes in your insurance carrier
- Changes in your tax due date
- Fewer deposits to escrow than expected
TIP: Municipalities offer a few common tax exemptions for disability, homestead, senior and veteran status. Check with your local tax office to see if you are eligible for these, or any other exemptions.
Why is an escrow review also known as an escrow analysis?
Mortgage lenders are required by regulations to perform an annual review of your account and provide a hard copy statement for your records.
What is a shortage?
A shortage may occur if the taxes or insurance premiums were higher than initially estimated or due to an estimated increase expected in the coming months.
If I want to remit the full escrow shortage amount, what do I need to do?
You have two options:
- Online: Log in to M&T Online or Mobile Banking, select your mortgage account and click the “Pay Now” button.
Your mortgage loan must be current to use this option.
- By Mail: Send a check made payable to M&T Bank and indicate on the memo line that you are making an escrow shortage payment.
Please mail the check to:
P.O. Box 64787
Baltimore, MD 21264-4787.
If you are paying your escrow shortage, the funds will be applied immediately, however your mortgage statement may not reflect changes until the analysis effective date.
What if I don’t pay the shortage payment?
If you decide not to pay the entire shortage payment in one lump sum, you can choose to pay the new monthly payment amount over the next 12 months. The escrow analysis calculation will automatically spread the shortage amount out over the next 12 months.
What is an overage?
An overage occurs if the current funds and payments in your escrow account are estimated to exceed the minimal payment amount for the escrow analysis 12-month period. An overage may occur if taxes or insurance premiums were lower than estimated or an estimated decrease is expected in the coming months. This overage amount may be sent out to you as a refund check when the escrow analysis is completed. If the surplus is less than $50.00 dollars it will be credited to your payment.
The M&T servicing team is happy to assist you.
Contact us if you have questions about your existing M&T mortgage.