How to Get an Escrow Refund After Paying Off Your Loan?

Paying off your mortgage is a huge milestone. But once the final payment is made, there’s often one last surprise waiting in your mailbox, an escrow refund.

If you’ve ever found yourself scratching your head wondering why a check arrived from your old mortgage servicer, you’re not alone. This blog unpacks what an escrow refund is, how it works, how long it takes, and how to ensure you receive every penny owed to you.

• You may be entitled to an escrow refund after paying off your mortgage.
• Lenders are required by law to return excess escrow balances within specific timelines.
• Refunds typically arrive by mail or direct deposit within 20-30 days.
• Double-check final payoff statements for accuracy.
• You don't need to request the refund, it should be automatic, but follow up if delayed.

When you first got your mortgage, your lender likely set up an escrow account, a separate fund used to pay your property taxes, homeowners' insurance, and possibly other fees. Each month, part of your mortgage payment went into this account.

When you pay off your loan, that escrow account is no longer needed. If there’s money left in it, that’s yours.

• Property taxes
• Homeowners insurance
• Flood insurance (if applicable)
• Mortgage insurance (if escrowed)

Lenders are required under RESPA (Real Estate Settlement Procedures Act) to return any remaining balance in your escrow account after a loan is paid in full. This refund is separate from your home equity or closing credits.

The leftover amount is the taxes or insurance that were estimated higher than what was ultimately due, or because you prepaid monthly amounts that were not required.

Most lenders issue escrow refunds within 20 to 30 business days after the mortgage is paid off.

If you’ve changed your mailing address, update it with your servicer before making your final payment. Many refunds are delayed or lost due to outdated contact information.

Refund amounts vary. It depends on:

• How much was in your escrow account
• What payments has the lender already made on your behalf
• The timing of your final mortgage payment

You paid off your mortgage in June, and your lender had just paid property taxes for the full year. You’ll get back the remaining balance minus what’s already been disbursed.

Usually, no. Mortgage servicers are legally required to close the escrow account and refund the balance within a reasonable time frame. However, if you haven’t received a refund after 30 business days, it’s a good idea to call your servicer.

• Confirm your loan payoff statement includes the escrow balance
• Provide your updated mailing address or direct deposit info
• Keep copies of tax and insurance payments for verification
• Follow up after 30 days if no refund is received

Understanding your escrow refund rights ensures you don’t leave money on the table after paying off your mortgage.

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It’s the return of unused funds from your mortgage escrow account after the loan is paid off or refinanced.

Only if your lender can’t locate you, or if your escrow has already been used to pay final expenses. Always keep your address updated.

Yes, if there’s a surplus. It’s required under federal law (RESPA) once your loan is fully paid.

Contact your lender and ask for a detailed breakdown. They’re required to provide a statement of escrow disbursements.

Typically within 20–30 business days. It can be faster with some servicers if direct deposit is on file.

• This blog is for informational purposes only and does not constitute legal or financial advice.
• Realpha is not a mortgage lender or broker. It provides commission-free home buying services through strategic partnerships.
• Be My Neighbor, LLC is a licensed mortgage company. NMLS #1743790. Equal Housing Lender.
• Escrow refund timelines may vary based on servicer policies and state regulations.

Always consult with your mortgage servicer for specifics regarding your loan.