Republic Bank & Trust

Escrow Accounts

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Escrow Accounts

What is escrow?

It's an easy way to manage property taxes and insurance premiums for your home. You don't have to save for them separately because you make one monthly payment where:

 

  • Part goes toward your mortgage to pay your principal and interest.
  • The other part goes into your escrow account for property taxes and insurance premiums (like homeowners insurance, mortgage insurance, or flood insurance).

When escrowed bills are due, we use the funds in your escrow account to pay them.

Don't worry about sending us your tax or insurance bills - we usually get a copy from your local property tax office and insurance company. If we do need you to send one to us, we’ll let you know.

Escrow Analysis Overview

Tax and insurance premiums change over time. We review your escrow account each year to make sure you'll have enough to cover your bills. To help with any unexpected increases, you need to keep a minimum balance in your account at all times. The minimum balance is calculated to be 2 months'-worth of escrow payments.

We'll send you a statement after each review to let you know of any changes to your account. Your monthly escrow payment will change 2 months after the review/analysis is run.

During your review, we figure out how much will be in your account each month for the next 12 months. At its lowest point, if it's projected to be:

  • Below the minimum balance, you'll have a shortage.  This can happen if the taxes or insurance premiums for the previous 12 months were more than expected, or if they're estimated to go up in the next 12 months.

    You can make up a shortage in 1 of 2 ways:
    • Pay it over 12 months. Part of your new monthly payment will include paying the shortage over 12 months.
    • Pay it in full. Send a check for the shortage amount and we'll lower your new payment by the shortage amount divided by 12.
  • Above the minimum balance, you'll have an overage. This happens if the taxes or insurance premiums for the previous 12 months were less than expected, or if they're estimated to go down in the next 12 months. We will mail you a refund check for any surplus amount over $50. It will be sent in a separate envelope from the review/analysis.

For information on your specific property taxes or insurance costs, contact your local property tax office or your insurance company.

Escrow Statement Overview

Escrow Statement

Click here to view a full statement


Here's a guide to the information you'll find in your escrow statement.

Click the links below to view a detailed overview of each section:


Shortage:

If you have a shortage — meaning that we've had to pay more out of your escrow account than you deposited into it — your statement will include an option to pay the entire amount up front, via the shortage payment coupon at the bottom of page 1. Detach the coupon and send it with your shortage payment if you choose this option.

Highlighted below are sections that explain why you have a shortage and your shortage amount, should you choose to pay. Shortgage

Overage:

If you have an overage - meaning you have more in your escrow account than needed — we will mail a refund check for any overage amount above $50 in a separate envelope.

Highlighted below is amount of your check.
Overage

Payment Info:

Page 1 of your escrow statement has your payment information. It shows your current monthly payment amount, your new monthly payment amount, and the date when the new payment amount goes into effect. This information will vary depending on whether you have a shortage or an overage.

The top cells are your previous year breakdown and the bottom cells are your current year.. Payment Info

Account Info:

At the top of your escrow statement is a box highlighting your mortgage and escrow account details.

Account Info

Actual Account Activity History:

This section shows the amounts actually paid to and from your escrow account during the previous year, along with the amounts we had projected from your previous review/analysis.

Account History

Projected Account Activity:

This section shows your expected escrow activity in the coming year. You'll see the total projected disbursements (payments) from your account, as well as the activity from month to month.

We’ll list the required minimum balance for your account, along with the smallest balance we expect it to actually have. The difference between these two amounts corresponds to your current shortage or overage amount.

Predictions are based upon current bill amounts and due dates.

Overage

Escrow FAQs

Escrow Accounts

  • What's an escrow account?
    An account you fund each month as part of your total monthly payment. We use it to make property tax and insurance payments for you. Items like mortgage insurance and flood insurance may also get paid from the account.
     
  • Why am I required to have an escrow account?
    Most of the time, escrow accounts are required if your down payment was less than 20%. There are benefits to having an escrow account, even if it isn’t required. It helps you manage large expenses like property taxes and insurance premiums so you don’t have to save for them separately. You make 1 combined mortgage and escrow payment each month and we deposit a portion into your escrow account. When your property tax and insurance bills are due, we pay them on your behalf, even if there are insufficient funds in the escrow account to cover the amount.
     
  • How can I open an escrow account?
    If you don't have an escrow account with us and want to open one, we'd be happy to help you. Please indicate which property tax or homeowners bills you would like escrowed via a signed, written request to:
    Republic Bank Escrow Department, PO BOX 70749, Louisville KY 40270.
     
  • Where can I find more information about my escrow account?
    Access your mortgage account online. Sign on to your mortgage account to check your escrow account balance and see when tax and insurance payments are made from that account. Sign up now if you don’t already have online account access.

    Check your escrow review statement. We review your escrow account at least once a year and send you a statement each time. It shows your previous escrow account activity, and projected future activity, including any changes to your total monthly payment.
     
  • What minimum balance is required?
    Sometimes taxes and insurance are higher than expected. To be prepared, you're required to keep a minimum balance in your account at all times. This helps make sure any unexpected increases are covered. Your required minimum balance is 2 months'-worth of escrow payments. When your yearly analysis projects that your account will fall below this minimum amount, a projected shortage results.
     

Escrow Payments

  • What bills are paid from an escrow account?
    • Property taxes
    • Homeowners insurance
    • Mortgage insurance (if it's required)
    • Flood insurance (if it's required)
    We do not pay:
    • Homeowners association fees
    • Condo association master policy premiums
    • Personal homeowners insurance fees or dues
    • Premiums for non-required insurance policies, such as separate personal property insurance
  • How is my escrow amount determined?
    • We estimate how much your taxes and insurance will cost over the next 12 months. We base this on the last-known bill amounts from your taxing authority and insurance company.
    • We divide that by 12 and add it to your monthly mortgage payment, and include a 2-month cushion amount.
    • We determine if your account keeps the minimum balance required throughout the year or if your payment needs to be adjusted so your account stays balanced.

     
  • Why didn't my payment go down when my taxes or insurance did?
    We review your escrow account once a year. If you want us to recalculate your payments sooner, please contact us. We can review your account ahead of schedule, as long as it’s at least 60 days before your next yearly review.
     
  • Why are you collecting funds when I paid my taxes and insurance premiums at closing?
    The payments you made at closing were for your initial deposit or for bills that were due immediately. You'll put funds into escrow each month for future property taxes and insurance premiums.
     
  • If my escrow amount changes, do the automatic payments I've scheduled get adjusted?
    If you've set up automatic mortgage payments with:
    • Our auto-draft: we'll adjust your payments.
    • Our online Bill Pay service: you'll need to update the amount.
    • A non-Republic Bank bill pay service: you'll need to update the amount.

     
  • Do I need to send you my tax and insurance bills each time they're due?
    No. We usually get them from your local property tax office and insurance company. We'll let you know if we need you to send the bills to us.
     

Yearly Escrow Review/Analysis

  • What's an escrow review/analysis?
    Each year, we review your account to make sure the escrow portion of your total monthly payment covers your property taxes and insurance premiums, while also maintaining the minimum balance your account must have. Changes to your property taxes and insurance premiums may cause your monthly payment to change. We'll send you an escrow statement after each review (some exceptions apply based on your account status).
     
  • What's a shortage?
    If the funds in your escrow account are projected to be below your minimum balance at the lowest point in the 12-month period, you have a shortage. This can happen if the taxes or insurance premiums for the previous 12 months were more than expected. Or, if they're estimated to go up in the next 12 months.

    You can make up a shortage in 1 of 2 ways:
    • Pay it over 12 months. Part of your new monthly payment will include paying the shortage over 12 months.
    • Pay it in full. Send a check for the shortage amount and we’ll lower your new payment by the shortage amount divided by 12.

     
  • What's an overage?
    If your escrow account is projected to have more than the minimum balance required at its lowest point in the 12-month period, you have an overage. This happens if the taxes or insurance premiums for the previous 12 months were less than expected. Or, if they're estimated to go down in the next 12 months. In most cases, we'll send you a refund check for that amount. The overage check will be mailed in a separate envelope from the escrow analysis.
     
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