Why does my servicer estimate my taxes differently than my county bill?

Why does my servicer estimate taxes differently than my county?

Your loan servicer's property tax estimate doesn't match your county's current bill because servicers calculate taxes differently than counties bill them. Servicers typically estimate annual property taxes based on the home's assessed value and local tax rates, then divide that amount by 12 for monthly escrow deposits. Counties often bill taxes in installments that don't align with calendar months, and tax amounts can change based on reassessments or rate adjustments that servicers haven't processed yet.

Check your Loan Estimate and Closing Disclosure to see how your servicer calculated the annual tax estimate. Compare that number to your county's annual assessment notice or tax bill. The servicer's estimate should be reasonably close to what the county shows as your annual tax liability.

If the numbers don't align, contact your servicer with your county tax documents. Servicers can adjust escrow calculations when tax amounts change, and they're required to analyze your escrow account annually. You can also request an escrow analysis if you notice significant differences between what you're paying monthly and what the county actually bills.