Legal Question in Real Estate Law in Illinois

Your lender will typically complete an analysis after the second installment of the property tax is paid. After applying a cushion, you will usually be offered alternatives with any excess funds (reduce escrow payments over the next year, apply to principal, get a refund, leave in). You should pay attention to the escrow analysis when you receive it. If you feel there is more than a reasonable cushion, you might try to contact the lender to review options. Exact requirements and calculations are beyond the scope of this page.

I am assuming you are referring to your tax and insurance escrow for your real estate loan. Lenders are allowed a "cushion" of two months of your taxes and insurance. If there is more than this at the end of the year, your lender will ask if you would like a refund, keep it in the escrow account, or possibly even apply it to your loan. If there is less than that, the lender will want a check from you, and your total payment may be increased to reflect this.