EscrowHomebuying Glossary
Escrow Shortage
When your escrow account doesn't have enough saved to cover your actual tax and insurance bills.
In plain English
An escrow shortage happens when your taxes or insurance premiums rise faster than expected, leaving your account underfunded. Your lender will spread the shortage repayment over the next year or offer a one-time payoff option.
Why it matters
A shortage notice isn't a penalty — it's simply catching your monthly collections up to your actual costs, and you typically have options for how to repay it.
Where you'll run into it
Guides and tools on TheBuyingPath that cover escrow shortage in context.
Related terms
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