An escrow refund is a process wherein your escrow account contains excess funds. There you will receive a check with the amount of any remaining balances. An escrow account is typically established to hold funds temporarily in a transaction until certain conditions or obligations are met. It acts as a safeguard to protect the interests of both parties involved in the transaction.

In various scenarios, such as real estate transactions, online purchases, or financial agreements, an escrow account is commonly used. For instance, when buying a house, the buyer often puts a certain amount of money into an escrow account to demonstrate their commitment to the purchase. The funds are held by a neutral third party, usually an escrow agent or company, until all conditions outlined in the sales contract are satisfied.

You should remember that not all balances in your escrow account are eligible for a refund. You can get an escrow refund unless the remaining balance is at least $50. If the escrow account has an excess amount of less than $50 at the time of the annual escrow account analysis, then the loan servicer has the option to refund the excess. But the loan servicer could choose to put the excess escrow money against the following year’s escrow payments instead. Another thing is that if there is an excessive amount on your escrow account after you finish paying off the loan, you are qualified for an escrow refund regardless of the amount.

Escrow fees are among the most commonly requested questions by buyers and sellers in the real estate industry. But when do you get an escrow refund? It’s a question that confuses buyers and sellers. Here’s the answer.