Florida Property Taxes and Escrow Accounts: What Buyers Should Expect

Buying a Florida home? Your mortgage lender may require an escrow account.

Here’s how it works and what to expect with your property taxes.

What Is Escrow?

Escrow is a separate account your lender uses to collect and pay:

• Property taxes
• Homeowner’s insurance

You pay into it monthly with your mortgage.

Why Lenders Require It

Lenders want to make sure taxes and insurance are always paid—to protect their investment.

Escrow = less risk for the bank.

How Your Escrow Payment Is Calculated

At closing:

• Lender estimates annual tax + insurance costs
• Divides by 12 to set your monthly escrow payment

Example:

• Taxes: $6,000
• Insurance: $2,000
• Escrow = $666.67/month

What Happens After Reassessment?

Florida counties reassess your property after you buy.

That can lead to a higher tax bill in year 2, which:

• Increases your escrow amount
• May trigger an escrow shortage (you owe the difference)
• Adjusts your mortgage payment going forward

What Is an Escrow Analysis?

Each year, your lender reviews your escrow:

• Compares estimated vs. actual taxes and insurance
• Adjusts your monthly payment
• Sends you a statement

If underfunded, you may:

• Pay the shortage in a lump sum
• Spread it over 12 months (higher payment)

Can I Avoid Escrow?

Some buyers with large down payments (often 20%+) can waive escrow—but:

• You’ll pay taxes + insurance yourself
• Risk of missing deadlines is on you

Most buyers find escrow convenient.

Final Thought

Understanding escrow keeps your mortgage payments predictable.

📞 Call Michael Renick at 941.400.8735 to estimate your escrow and avoid surprises after closing.

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