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.

Key Takeaways:

• 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.

What Is an Escrow Account?

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.

Common Costs Paid Through Escrow:

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

Why Do You Get an Escrow Refund?

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.

How Long Does It Take to Get an Escrow Refund?

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

Pro Tip:

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 Many refunds are delayed or lost due to outdated contact information.

How Much Can You Expect to Get Back?

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

Example:

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.

Do You Need to Request the Escrow Refund?

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.

Final Checklist to Ensure You Get Your Escrow Refund

• 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
  

Conclusion: Wrap Up Your Home Loan Journey with Confidence

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

If you're planning your next move, whether refinancing, upsizing, or buying a new property, you deserve tools that prioritize transparency, trust, and value.

That’s where realpha and Be My Neighbor come in. While Be My Neighbor (NMLS #1743790) offers education and access to licensed mortgage professionals, realpha is changing the home buying game with a zero-commission model that gives you more purchasing power.

Your mortgage journey doesn’t have to end with your payoff. Let it be a new beginning, on your terms.

FAQs: 

What is an escrow refund check?

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

Can I lose my escrow refund?

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.

Do all mortgage companies give escrow refunds?

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

What if my escrow refund is too small or missing?

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

How long after paying off my mortgage will I get my escrow refund?

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

Disclosures:

• 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.