<prompt> Human: I am a first time homeowner and I am very confused about a sudden reduction in my escrow portion of my monthly mortgage payment.nbsp;I received a check for nearly 3000 as an escrow surplus today. Further investigation showed that my monthly escrow amounts dropped from 780 to 100 per month. This was due to a drastic reduction in city property tax.nbsp;This has resulted in the surplus not as much needed in my escrow account, and also a lower monthly mortgage payment. nbsp;Before I get too excited...is this too good to be true? I looked at the citys website and the tax rate is listed only as recently as 2016. It has gone up slightly each of the several years up to and including 2016.nbsp;Is it safe to cash the surplus check?nbsp;What could cause the tax rate to fall so significantly?nbsp;Is there anything else I should be aware of?nbsp;Edit: After making some phone calls, doing research online and through what I had retained for statements, this is what I have found. nbsp;I purchased the house in April, 2017. Apparently some of the closing costs included the 1st half of 2017 tax obligation. The lender received the tax money from the closing costs, and also made a payment from my escrow account. Due to this double payment, my tax account was nearly paid up for the year 2nd half was slightly more expensive due to the increase in tax rate. The difference owed from my escrow was 81. nbsp;The lender performed an escrow analysis and based my projected 2018 taxes on ONLY the most recent tax bill...81. The analysis projects a 1st and 2nd half tax bill of 81 each. As a result, my escrow account was vastly overfunded. They cut me the surplus check, and also reduced my mortgage payment accordingly. nbsp;After explaining the situation, they told me they would not perform the escrow analysis again until 2nd half of 2018. The only chance was for me to submit a written letter with a copy of my projected 2018 tax bill something I have not received. I called the city tax office and they told me that it was between me and my lender. Not their problem since the lender messed up. nbsp;I have decided to manage this myself until the 2nd half of 2018 when the lender revises the escrow analysis. I calculated how much I would owe for taxes, and I will set this much money aside in my savings account until the tax bill is due. Ill square up with them and proceed with a correct mortgage and escrow account once the lender fixes that. nbsp;The only other obstacle was an escrow account cushion required by my lender. After 2 phone calls, neither associate was able to tell me how this was calculated or how much I would need to put aside to cover this. The fine print mentions that the maximum cushion allowable by law is 16 of the annual disbursements. I took my projected 2018 tax bill and hazard insurance and divided by 6 to get this amount. Ill add this to my savings, so that when they re-do the escrow analysis Ill have that money ready too. nbsp;With all of that said, I will retain the same mortgage payment by splitting part of the payment into my savings account, and still get to retain a little over 2,200 from the surplus check. That will go towards paying off other debt. nbsp;Please chime in if you see any flaw in this plan. Thanks again everybody for all of your help. Its a shame I was unable to waive my escrow and manage these payments myself because I dont have much faith in the lender managing this account anymore!  <response>: The people who calculate escrow amounts for mortgage companies at least the ones who have done mine are not that great at their jobs. They constantly under and over estimate year to year.My experience aside, that doesnt mean the people who estimated your escrow didnt do a great job fixing a mistake. To feel confident about the situation, you should check their work. First, call your mortgage company and ask for a detailed breakdown of everything your escrow pays for. They should say at least, taxes and homeowners insurance. Whatever they say, make a list. If they dont say taxes or insurance, add those to the list anyway, as youll still have to pay those.Now that you have a list, contact the organization responsible for each item on your list and ask how much you should be charged for 2018. Call your county tax office to confirm estimated property tax burden for 2018. Call the insurance company youve chosen to confirm your 2018 premiums. Also contact anyone else responsible for any other items on the list of things your escrow pays for. Write numbers down to each item once youve confirmed. Be prepared for the actual numbers cost to be different than what your mortgage company expects to come out of your escrow. If all the numbers line up escrow pays all estimated costs then youre free and clear to cash that check. If the numbers are off, you may want to cash the check then make a one time additional escrow payment to balance your escrow account properly. You know, to do that thing the mortgage is supposed to be doing for you. Many people prefer having escrow, but if you enjoy doing this all manually it may be an option to have your mortgage company drop escrow and let you pay all your own expenses. I wouldnt suggest this unless you are very good at managing your own money. These are often yearly expenses with hefty consequences if they are paid late. Because of this, many mortgage companies wont let customers drop escrow. It all depends on the company and your personal situation. 