Projected monthly amount for taxes, property insurance, and other charges expected to be paid from mortgage escrow.
Estimated Escrow is the projected monthly amount shown in the Projected Payments table for taxes, property insurance, and other property charges expected to be paid from the mortgage escrow account.
Estimated Escrow helps explain why a payment quote based only on principal and interest is incomplete. It adds the applicable monthly property-cost estimate to the payment picture before the mortgage enters servicing.
The amount is not permanently fixed. Final tax information, insurance premiums, coverage requirements, or a later escrow analysis can change the amount collected. A fixed-rate mortgage can therefore have a changing total payment even when its scheduled principal and interest remain level.
Borrowers see Estimated Escrow in the Projected Payments table on the Loan Estimate and Closing Disclosure. Nearby information identifies estimated taxes, insurance, and assessments and indicates which categories are expected to be paid from escrow.
After closing, the estimate gives way to the Monthly Escrow Payment collected by the servicer. Periodic Escrow Analysis then updates the projection as bills and account activity change.
| Figure | What it means |
|---|---|
| Estimated Escrow | Pre-closing monthly projection for property charges expected to be escrowed |
| Estimated Taxes, Insurance & Assessments | Broader property-cost estimate that can include charges not paid through escrow |
| Initial Escrow Deposit | Up-front amount collected at closing to establish the account |
| Monthly Escrow Payment | Ongoing amount collected after closing for projected escrow disbursements |
| Escrow Balance | Amount held in the account at a particular time |
Estimated annual property taxes are $4,800 and the homeowners insurance premium is $1,440. If both are expected to be escrowed, their basic monthly equivalent is $520. The disclosure uses the applicable projected amounts to show estimated escrow as part of the total monthly payment.
The initial escrow deposit due at closing is a separate figure because it depends on bill timing and the account setup. Later, an escrow analysis may change the monthly collection when the actual tax or insurance amounts change.
Estimated Escrow differs from an Escrow Account. Estimated Escrow is a projected monthly payment component, while the escrow account is the account that receives collections and pays covered bills.
It differs from the Initial Escrow Deposit because the deposit is collected up front at closing, while Estimated Escrow is a monthly projection.
It also differs from Escrow Balance. Estimated Escrow is an incoming monthly amount; escrow balance is the amount currently held after collections and disbursements.