What Is Escrow and Why Your Payment Can Change After Closing
What Is Escrow and Why Your Payment Can Change After Closing
One of the most confusing moments for new homeowners is getting a notice that their monthly payment has changed. The interest rate didn’t move, so what happened?
Most of the time, the answer is escrow.
What Escrow Really Is (In Plain English)
Escrow is simply an account your lender uses to collect money for:
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Property taxes
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Homeowners insurance
Instead of paying those bills all at once, you pay a little each month as part of your mortgage payment.
Why Escrow Payments Adjust
Escrow payments can change when:
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Property taxes increase or decrease
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Insurance premiums change
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The lender adjusts based on real costs after the first year
These adjustments are common and usually modest but they can feel confusing if you weren’t expecting them.
The Good News
Escrow is designed to:
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Spread costs evenly throughout the year
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Prevent large, unexpected bills
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Make homeownership easier to manage
When buyers understand how escrow works, payment changes feel manageable—not alarming.
Castle Rock Realty, LLC is a boutique real estate brokerage serving buyers and sellers across South Central Wisconsin, including Juneau, Adams, and Sauk counties. With a team of experienced agents and deep local roots, Castle Rock Realty is known for integrity, reliability, and helping clients achieve their real estate goals with confidence. Ranked among the top offices in the South Central Wisconsin MLS, our team takes pride in being your trusted local experts.
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