Who this article is for
This article is for:
Borrowers who want to understand their monthly payment breakdown
New homeowners unfamiliar with escrow accounts
Anyone reviewing their first mortgage statement
Borrowers whose taxes or insurance have recently changed
What escrow is
Escrow is a separate account your lender uses to pay your property taxes and homeowners insurance on your behalf.
Instead of paying these large bills once or twice a year, you contribute smaller amounts each month as part of your mortgage payment.
Escrow ensures your taxes and insurance are always paid on time—automatically.
How escrow works with your Nestwise mortgage
Your monthly mortgage payment includes:
Principal – the amount that reduces your loan balance
Interest – the cost of borrowing
Escrow – funds held for taxes and insurance
Nestwise (or your servicing partner) collects the escrow portion each month and uses it to pay:
Property taxes when they’re due
Homeowners insurance premiums
You don’t have to pay these bills yourself unless you choose a non-escrowed loan (if eligible).
What escrow covers
Escrow typically covers:
Property taxes
Homeowners insurance
Depending on your location and loan type, it may also include:
Flood insurance (if required)
Mortgage insurance (if applicable, though this is usually part of your monthly payment, not escrow)
Your Closing Disclosure and dashboard will show exactly what’s included.
How your escrow amount is calculated
Your escrow amount is based on:
Your home’s assessed property tax rate
Your homeowners insurance premium
Required cushion amounts under federal guidelines
Nestwise (or your servicer) estimates these costs and divides them into 12 monthly payments.
Your escrow balance changes throughout the year as taxes and insurance are paid.
Why your escrow payment may change
Escrow amounts can change because your:
Property taxes increase or decrease
Insurance premium changes
County reassesses your home’s value
New policy renewals differ from last year’s cost
If this happens, you’ll receive an escrow analysis from your servicer showing:
Any increase or decrease in your monthly payment
Whether you have a shortage or surplus
How the new amount is calculated
This is normal and happens with most homeowners.
Escrow shortages and surpluses
A shortage happens when there wasn’t enough money in the account to cover your taxes or insurance.
A surplus happens when too much was collected.
If there’s a shortage, you can:
Pay it in full, or
Spread it out over 12 months (your payment will adjust)
If there’s a surplus, your servicer may send you a refund check (usually for amounts over $50).
Do Nestmatch™ contributions affect escrow?
No.
Escrow covers taxes and insurance only.
Nestmatch (when active) is a separate rewards program tied to on-time mortgage payments.
When you should contact support
Reach out if:
Your escrow payment doesn’t match your statement
You recently changed insurance providers
You believe your taxes were miscalculated
You received an escrow analysis you don’t understand
Support can review your escrow account and explain any changes.