Escrow Analysis | Independent Bank

Escrow FAQs

Answers to Commonly Asked Questions About Your Escrow Analysis

What is an escrow account?

An escrow account is where funds are held to pay property taxes and insurance bills on your behalf. If your loan is escrowed, a part of your mortgage payment goes into your escrow account every month.

What date does the shortage need to be paid by?

Full or partially paid shortages should be paid by April 16, 2025. If a partial payment is made, please email EscrowServicing@ibcp.com to let them know a partial shortage payment was made on your account, and they will rerun the analysis and mail it to you with your new May 1, 2025, payment reflecting the shortage amount paid.

Is it normal for an escrow payment to increase?

Yes, when property taxes and/or insurance increase, so will the amount needed to properly fund the escrow account. If you disagree with the amount you are required to pay in taxes or insurance, you will need to contact your taxing authority or insurance agent. If you believe we paid too much or too little in taxes or insurance, please send the supporting documentation to EscrowServicing@ibcp.com.

What are the common reasons an escrow payment increases or decreases?

Increase in taxable value
Loss of PRE (Principal Residence Exemption)
Unpaid water/sewer bills
New assessments
New purchase/construction
Change in insurance premiums/provider
Forced-placed insurance

What date will the new escrow payment take effect?

All changes are effective for your May 1, 2025, payment.

If I paid my escrow shortages, why would my payment still go up?

When your taxes and/or insurance increase from the amounts paid last year, the escrow portion of your monthly payment will also increase to cover the higher disbursements. The escrow shortage is the amount needed to ensure the escrow account is fully funded in the upcoming year per the requirements under the loan documents, as well as state/federal law.

As your property taxes and insurance premiums increase each year, the amount needed to fund your escrow account may go up each year as well.

Can I pay additional funds into my escrow account to keep the same payment or even lower it?

No. Unfortunately, this is not allowed due to loan servicing regulations for escrow accounts.