Plan, don't predict
Surplus check and known increases
Surplus after the known annual increases entered
+$300.00
The increases entered equal $1,200.00 per year, or about $100.00 per month. This comparison is a planning illustration, not a forecast of your next escrow analysis.
Why a servicer sends a surplus
A surplus exists when the current escrow balance exceeds the target balance at the time of analysis. The annual statement should explain how the servicer is handling it. A surplus does not guarantee that next year's bills or payment will be lower.
Before using the check
- Verify the check and annual analysis with the servicer.
- Confirm the latest property-tax amount and insurance renewal premium.
- Look for a delayed reassessment, especially with new construction.
- Check whether an exemption, refund, policy change, or billing timing created it.
- Decide how much uncertainty your emergency savings can comfortably absorb.
Why a surplus can be followed by a shortage
The analysis uses projected cash flows and bill timing. A later tax reassessment, insurance increase, corrected due date, or underestimated disbursement can change the next calculation. That is why the planner compares the check only with increases you already know—not with a promised future balance.
Surplus, shortage, and deficiency are different
- Surplus: current balance is above the target balance.
- Shortage: current balance is below the target balance.
- Deficiency: the escrow account has a negative balance.