Mortgage Loan Escrows Frequently Asked Questions (FAQs)

Find out more about Mortgage Loan Escrows, how they work, payments, and other helpful information!

What is an escrow account?

An escrow account is when you, as the borrower, make monthly mortgage payments that include the anticipated annual amount needed to pay taxes and insurance premiums. These funds are placed in an escrow account until the lender and/or service provider pays the taxes and insurance as they come due.

Your lender pays your real estate taxes. Why do I still get a bill?

Counties do not send tax bills to mortgage companies. These are always sent to the homeowner. The lender and/or service provider uses a 3^rd party to track amounts due so these can be paid. When you receive your tax bill you should review this and file it for your records.

When is an escrow analysis performed?

This is performed annually in April. The results are then mailed to you. If there are any changes to your payment it will begin with the June 1^st payment due date.

What are the most common reasons for my escrow payment to change?

Changes are typically due to an increase and/or decrease in real estate taxes and/or insurance premiums. Increases will likely increase your monthly payment and a decrease will likely decrease your payment.

What is an escrow overage?

This will happen when your escrow analysis shows you have more reserves in the escrow account than the required minimum balance. If an overage is discovered during the analysis, the difference will then be refunded to you.

What is an escrow shortage?

This will happen when the escrow analysis shows that there is not enough money in the account to meet the required minimum balance. After the analysis, the monthly payment will be adjusted to make up the shortage in up to 12 months, or you may cover the shortage by making a one-time payment. The one-time payment must be received within the middle part of the month prior to the change. This can be done by mailing a check or contacting the service provider to allow a one time ACH payment from your account. This will allow the payment to adjust correctly for the June 1^st payment.

What is a required minimum balance?

The required minimum balance is the smallest amount of money you can have in your escrow account at any time during the year. The required minimum balance (also called a cushion) may include up to two months of escrow payments minus mortgage insurance (if applicable) to cover potential increases to your taxes and insurance premium.

Who should I contact with any questions on my escrow?

You can contact your service provider with any questions and/or a Zing Mortgage Loan Representative.

What happens if my loan is not escrowed for taxes and insurance?

It will be your responsibility to pay your real estate taxes and insurance. If these are not paid, lenders reserve the right to pay the outstanding installment and an escrow account will be established on your loan. The actions may cause an increase in your total mortgage payment amount.

Truth In Savings Disclosure

TRUTH IN SAVINGS DISCLOSURE

Except as specifically described, the following disclosures apply to all the accounts.

Rate Information. The dividend rate, or interest rate, and annual percentage yield on your accounts are set forth on the reverse side. The annual percentage yield is a percentage rate that reflects the total amount of dividends/interest to be paid on an account based on the dividend/interest rate and frequency of compounding for an annual period. For Certificates of Deposit and IRA Certificates of Deposit, the interest rate and annual percentage yield are fixed and will be in effect for the term of the account. The annual percentage yield is based on an assumption that interest will remain on deposit until maturity. A withdrawal will reduce earnings.
Nature of Dividends. Dividends are paid from current income and available earnings after providing for the required reserves. The dividend rates and annual percentage yields are the prospective rates and yields that the Credit Union anticipates paying for the applicable dividend period.
Compounding and Crediting. Interest and dividends will be compounded and credited as set forth on the reverse side. The dividend/interest period for each account is also set forth on our Rate and Fee Schedule. The dividend/interest period begins on the first calendar day of the period and ends on the last calendar day of the period.
Balance Information. The minimum balance required to open each account is set forth. Interest is calculated by the daily balance method which applies a daily periodic rate to the principal in the account each day.
Accrual of Dividends. Dividends will begin to accrue on cash deposits on the business day you make the deposit to your account. Dividends will begin to accrue on noncash deposits (checks) on the business day you make the deposit to your account. If you close your account before accrued dividends are credited, accrued dividends will not be paid.
Account Limitations. The account limitations for each account are set forth in our Membership and Account Agreement
Your account will mature on the maturity date set forth on your account receipt or renewal notice.
Early Withdrawal Penalties. A penalty may be imposed if you withdraw any of the certificate funds before the maturity date or the renewal date, if this is a renewal account.
Amount of Penalty. For Certificates of Deposit and IRA Certificates of Deposit the amount of the early withdrawal penalty for your account is 90 days’ interest for a term of 12 months or less, and 180 days’ interest for a term over 12 months.
How the Penalty Works. The penalty is calculated as a forfeiture of part or all of the interest that have been earned on the account. This penalty applies to earned interest and principal.
Renewal Policy. Certificate of Deposit accounts will automatically renew for another term upon maturity. You have a grace period of seven days in which to change or withdraw the funds without being charged an early withdrawal penalty.
Exception to Early Withdrawal Penalties. At our option, we may redeem the account before maturity without imposing an early withdrawal penalty under the following circumstances:
- When an account owner dies
- or is determined legally incompetent by a court
- or other body of competent jurisdiction.
Nontransferable / Nonnegotiable. Your account is nontransferable and nonnegotiable. The funds in your account may not be pledged to secure any obligation of an owner except obligations with the Credit Union.
FEES FOR OVERDRAWN ACCOUNTS. Fees may be imposed on each check, draft item, ATM card withdrawal, debit card withdrawal, debit card point of purchase, preauthorized automatic debit, telephone initiated withdrawal or any other electronic withdrawal or transfer transaction that is drawn on an insufficient available account balance. The entire balance in your account may not be available for withdrawal, transfer or payment of a check, draft or item. You may consult the Funds Availability Policy for information regarding the availability of funds in your account. Fees for overdrawing your account may be imposed for each overdraft, item or transaction. If we have approved an overdraft protection limit for your account, such fees may reduce your approval limit. Please refer to the Rate and Fee Schedule for current fee information.

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Preferred Checking

Clear Card

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Minimum Opening Balance

Suggested opening amount- $25

ID Safe Choice Charge Possible

Yes

Direct Deposit

Accepted and encouraged

Dividends Paid

Privilege Pay

Available after 90 days

Overdraft LOC

Available immediately, with approved credit

ATM/Debit Card

Instant Issue

Shared Branching

Available

Free Bill Payer

Available

Mile High APY

Yes

N/A

Yes

5 Buck Club

Yes