- 2019 Posts

  1. Is It Time to Refinance? Here Are The Steps You Need to Take
  2. Saving For Your First Home? Here’s Everything You Need to Know
  3. Options, Options, Options
  4. A Personalized Approach
  5. Credit Confusion
  6. Building Your Dream Home
  7. Tax Time in Wisconsin
  8. Don’t Let Intimidation Get in the Way of Home Ownership
  9. Setting Financial Goals for the New Year
  10. Buying a home after bankruptcy

+ 2018 Posts

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+ 2015 Posts

What to know about Escrow for Taxes and Insurance with your Home Loan

December 08, 2015

Many lenders require you to escrow for property taxes and homeowner’s insurance. Let’s discuss a few basics about what it means to escrow.


Each month, you will pay a portion of the taxes and your home owners insurance with your mortgage payment to your escrow account. This amount is determined by dividing your estimated annual property taxes and homeowner’s insurance by 12 months.  For example, if your annual property tax bill is $1,000 and your homeowner’s insurance is $200, you will pay $100 a month.


Most people find it easier on the budget to pay their taxes and insurance on a monthly basis. It takes extreme discipline to put this money away on your own every month, so including it with your mortgage payment takes the worry out of paying these important bills.


Many loans require you to escrow, depending upon your loan type and your lender’s requirements. Your mortgage payment will be set up to include your monthly payment for the escrow account, paying these directly to the lender included with your mortgage payment. The lender then maintains a special account on your behalf to save the money paid toward your taxes and insurance. At the end of the year, this money is then distributed – usually directly to your county tax treasurer and insurance company.


Property taxes fluctuate with increasing or decreasing property values and home assessments made by your county treasurer. An estimated amount is used to determine the property taxes for the coming year.  Usually lenders err on the side of caution, and will set up your escrow account with a two month cushion, allowing for possible fluctuations in your tax bill.


GSF Mortgage specializes in many types of home mortgages, and can advise you on which loan is right for your needs. GSF services the Greater Green Bay, Fox Valley, and Fond du Lac areas. 


Ron Meyer

GSF Mortgage Corporation

300 Patriot Dr. Little Chute, WI 54140

(920) 788-9608 


NMLS #1018 & #222668