Escrow Analysis

What is an escrow account?

An escrow account is a separate account connected to your mortgage that holds money to pay certain homeownership expenses on your behalf.

Rather than having to come up with the full amount of your property taxes or homeowners insurance when those bills are due, you pay a portion toward those expenses each month as part of your mortgage payment. Tongass Federal Credit Union (TFCU) puts that money into your escrow account and uses it to pay the bills when they are due.

In simple terms: you contribute to your escrow account each month as part of your mortgage payment, and TFCU uses that money to pay eligible bills for you.

What does my escrow account pay for?

Depending on your loan, your escrow account may be used to pay:

  • Property taxes
  • Homeowners insurance
  • Private mortgage insurance (PMI), when applicable

Flood insurance is not paid through TFCU escrow accounts. If flood insurance is required for your property, you are responsible for paying it directly.

You can view your escrow account and its activity in online banking. Because the money in the account is held specifically to pay escrow expenses, you cannot make deposits to or withdrawals from it.

What happens during an Escrow Analysis?

During your annual Escrow Analysis, we look at:

  • How much money was collected in your escrow account

  • The expenses paid from your account

  • Your expected property taxes and homeowners insurance costs for the coming year

  • Any increases or decreases in those expenses

  • The balance required to be maintained in your escrow account

We use that information to determine how much needs to be collected for escrow as part of your monthly mortgage payment for the next year.

Your Escrow Analysis statement is mailed to you in October and will tell you if your mortgage payment is changing and what your new payment amount will be. Any new payment amount takes effect with your December 1 payment.

TFCU does not currently provide the Escrow Analysis statement electronically, so watch your mail for your statement.

What if I have an escrow shortage?

An escrow shortage means there isn't enough money in your escrow account to meet the required balance based on your projected expenses.

For example, if your property taxes or homeowners insurance cost more than expected, the amount previously collected for escrow may no longer be enough.

If your Escrow Analysis shows a shortage, you have two options:

Option 1: Pay the shortage

You can pay the shortage as a lump sum.

Paying the shortage means that amount will not need to be divided across your next 12 monthly payments. However, the escrow portion of your mortgage payment may still change based on your projected property taxes, homeowners insurance and required escrow balance for the coming year.

Your Escrow Analysis statement will provide the amount needed to pay the shortage and information about your new monthly payment.

Option 2: Spread the shortage over 12 months

If you do not pay the shortage as a lump sum, no action is required. The shortage will automatically be divided across your next 12 monthly mortgage payments.

This means your monthly payment will include both the escrow amount needed for the coming year and a portion of the shortage from the previous year.

Your Escrow Analysis statement will show your new monthly payment amount beginning December 1.

What if I make automatic mortgage payments?

If your Escrow Analysis changes your monthly mortgage payment, your mailed statement in October will tell you the new amount. The new payment amount takes effect with your December 1 payment.

What you need to do next depends on how your automatic payment was established.

TFCU set up my automatic payment

If TFCU set up your automatic mortgage payment, we can update the payment amount to reflect your new mortgage payment.

I set up my payment through another financial institution

If you arranged your mortgage payment through another bank or credit union, you are responsible for contacting that financial institution and updating the automatic payment to the new amount shown on your Escrow Analysis statement.

If you're not sure how your automatic payment is set up, contact our Servicing Department.

1 Subject to the terms and conditions detailed in the Guide to Benefits. Participating merchants on BaZing are not sponsors of the program, are subject to change without notice, may not be available in all regions and may choose to limit deals.

2 Insurance products are: NOT A DEPOSIT. NOT FEDERALLY INSURED, NOT AN OBLIGATION OR GUARANTEED BY THE CREDIT UNION, ITS AFFILIATES, OR ANY GOVERNMENT AGENCY.

3 Based on approved credit.