How to Fix a Negative Escrow Account

by Cynthia Measom ; Updated April 19, 2017

Even though an escrow account's design forces you to contribute funds to cover your annual property tax bill, it can fall short. When city or county taxes rise, the amount you have dutifully contributed to the escrow account may not be enough to cover the increase and leaves your escrow account lacking. In some cases, the shortfall may prove significant. Take advantage of options that allow you to fix a negative escrow account in a way that works best for your budget.

Step 1

Find out the amount you need to pay to fix the negative escrow account. Lenders often send borrowers a letter detailing the shortage amount and options. Options include paying the escrow shortage amount as a one-time payment or allowing the lender to add the escrow shortage to your upcoming monthly payments.

Step 2

Pay the shortage amount in full to the lender. Make the payment directly to the escrow account, not toward your mortgage balance. Make your mortgage payment separately.

Step 3

Continue making payments toward your mortgage and wait for the lender to add the negative escrow balance to your payments if you do not want to pay the balance in full.


  • When refinancing a mortgage, ask the lender about rolling the negative escrow balance into your new loan. If you have enough equity in your home at the time of the refinance, you can use it to fix the negative escrow account.


  • If you do not elect to pay the negative escrow balance in full, the lender can divide the amount due and add it to your monthly payments. This will increase your monthly house payment.


About the Author

Based in Texas, Cynthia Measom has been writing various parenting, business and finance and education articles since 2011. Her articles have appeared on websites such as The Bump and Motley Fool. Measom received a Bachelor of Arts in English from the University of Texas at Austin.

Cite this Article | A tool to create a citation to reference this article Cite this Article

Related pages

tsp thrift savings plan loanlaptops on installments for studentswhat determines if a car is totalledfica withholding ratewhat are non formulary drugshow to send moneygram at walmartwhat is insurance twistingsurety bond vs fidelity bondfica withholdingtransunion remove fraud alertchristmas food baskets for the needycitibank malaysia customer service numberkmart com weekly adstraditional income statement formatactivate my vanilla visadoes 401k reduce agiwarrant officer base paysell westgate timeshare propertycalculate price to earnings ratiowhat does return accepted by irs meandfas w2 requestknee surgery cost without insurancewho can use 1040ezsend money from vietnam to usaahcccs eligibility requirementsdcf terminal value calculationcalifornia law for renters rightsnj individual tax returnwestgate timesharecharles schwab sep iraadvantages and disadvantages of irastatute of limitation in floridafannie mae foreclosed homes for salewill a cosigner help with a car loanpay raise calculator percentagerrsp mutual funds or gichow to refine scrap gold at homebrand formularysoyd depreciationcosigning for a car loanwithdraw paypal money to debit cardannuity rate of return formuladefinition of casualty insurancehouse repossessed what happenshow to check if money order was cashedebt bankschase ebt account loginstudent loan tax offsetlegally blind tax benefitscapital gains on second home salemarquis auto leasefresno county property tax billira transfer ruleshow to report 1042 s income on 1040tubal ligation reversal insurance coverageadvantages and disadvantages of consumer creditgrant deed in californiawhen selling a house who pays closing costssams club payment optionsmeaning of risk premiumhomeowner association bylawssimplified method worksheetcandy striper volunteer opportunitiesexperian customer service humanveracity ethicsusps postal money order trackingwhat happens if you forget to file a 1099 rland contract vs mortgagefree grants for cosmetology schoolfiling form 4868 electronically