A Benefit from Having an Escrow Account
An escrow account helps spread property tax costs throughout the year by collecting a portion with each monthly mortgage payment. This helps borrowers avoid having to come up with a large lump sum when taxes are due, making budgeting more predictable and reducing the financial burden of those annual bills. If the escrow account ends up with more money than is needed, the borrower may receive a surplus refund. It is especially important for borrowers to have their address up to date with Cayetano so they can receive their escrow surplus refund letters!
These are some of the most common reasons a borrower might receive an escrow surplus:
Homestead exemption is applied: If the borrower qualifies for a homestead exemption, their property taxes may decrease. If the escrow account was collecting based on higher taxes before the exemption, a surplus can accumulate.
Property tax rates decrease: If the local taxing authority lowers tax rates or the property's assessed value decreases, the actual tax bill may be lower than what was estimated for escrow.
The borrower pays taxes directly: If a borrower pays their property taxes out of pocket even though they have an escrow account, the escrow funds set aside for taxes may not be used, resulting in a surplus.
Overcollection based on prior estimates: Escrow payments are based on projected tax. If the estimates are higher than the actual bills, excess funds remain in the account and any excess escrow funds over $50.00 need to be refunded.
Our most recent information shows that the 1,195 loans which are using an escrow account, received an average surplus refund of $523.32.
Borrowers have the following options for their surplus funds:
1. Apply the surplus to their principal balance.
2. Apply the surplus toward future monthly payments
3. Keep the remaining funds in escrow, which may reduce their monthly payment.
4. Request a refund check.
To ensure timely processing of the selected option, borrowers must make sure they are following these requirements:
The surplus letter must be signed by all borrowers listed on the loan.
If the borrower is requesting a refund check, they must provide the physical mailing address - not an email address - where they would like the check sent.
Completed surplus letters may be submitted by either of the following methods:
Mail: Cayetano Development
P.O. Box 365 La Blanca, TX 78558
Email: helpdesk@cayetanodevelopment.com
If borrowers have any questions or concerns, they may contact our office at 956-464-4431. Our Call Center team will be happy to assist them. If additional support is needed, the call will be transferred to the Tax Department for further assistance.
