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Columbia Bank

Understanding Your
Escrow Statement

An Escrow Account is an account that the Bank establishes and controls on your behalf to pay taxes, insurance premiums (including flood insurance), or other additional charges associated with your mortgage loan.

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Getting to know your Escrow Account:

Each month a portion of your total mortgage payment is placed into your Escrow Account to cover your tax and insurance bills. We have built this guide to help you understand how escrow works and how to view your upcoming Escrow Analysis Statement. 

Frequently Asked Questions:

  • Is my escrow payment in addition to my monthly mortgage payment?
    • No, your mortgage payment consists of 3 main components including principal, interest, and escrow. Each time you make a monthly payment, a portion of your payment is deposited into your personal Escrow Account.
  • What is the purpose of an Escrow Account?
    • The Bank maintains an Escrow Account on your behalf to ensure your property taxes and all insurance payments are made in a timely manner. 
  • What determines my Required Minimum Escrow Balance?
    • According to Federal Law, the Bank can hold up to a two-month “cushion” of escrow funds. This Cushion or reserve are funds that we may require you to pay into an Escrow Account to cover unanticipated disbursements or disbursements made before your payments are available in the account.
  • Why would my escrow bill amounts change?
    • Escrow bills can change for a variety of reasons including:
      • A rise in insurance premiums
      • Increase in property taxes
      • If at any time you question why a bill was raised, we recommend contacting your tax office or insurance provider directly.
  • What happens when my escrow bills are lower than anticipated?
    • Your Escrow Analysis Statement will reflect a surplus. Surpluses of $50 or more are required to be returned within 30 days of Escrow Analysis. Surpluses of less than $50 will be evenly spread as a credit to next year’s payments.
  • What happens when my escrow bills are higher than expected?
    • Your Escrow Analysis Statement will reflect a shortage or a deficit of your Escrow Account. Here’s the difference:
      • A shortage: You do not have the required minimum balance for the coming year. 
      • A deficit: Your Escrow Account is negative. Rest assured, the Bank has paid your taxes and/or insurance, but you will be required to pay the deficit

  • Paying a shortage or deficit can be done in 3 ways and Columbia Bank offers flexible options to choose from.
    • 12 Month Spread: No action is required; begin making your new monthly payment as of the effective date of your Escrow Statement.
    • One-Time Payment: Pay your shortage or deficit in full to reduce your new monthly payment.
    • Partial Payment: Pay part of your shortage or deficit to reduce your new monthly payment.
    • If you choose to make a one-time or partial payment, payments can be made by visiting any Columbia Bank branch, mailing your payment to our corporate headquarters with attention to our Loan Servicing Department, or by authorizing the Bank to make a transfer via letter or email.
  • Can my monthly payment still go up if I pay my shortage or deficit ahead of the new payment effective date?
    • Yes, if your projected property tax or insurance payments are higher, your monthly payment amount may still go up.
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