Texas Homeowners: Why You Need to Check Your Escrow Account Before October 1st

If you own a home in Texas, there’s one important date you can’t afford to ignore: October 1st. That’s when county appraisal districts release the new property tax bills and for many homeowners, it’s when the first signs of an escrow shortage show up.

What is an Escrow Shortage?

Most Texas homeowners pay their property taxes and homeowners insurance through an escrow account managed by their lender. Each month, part of your mortgage payment goes into escrow to cover these costs.

But here’s the catch: if your property taxes or insurance premiums increase (which they often do in Texas), your escrow account may not have enough money to cover the full bill. That’s called an escrow shortage.

When this happens, your lender will either:

• Require a lump-sum payment to cover the shortage
• Or raise your monthly mortgage payment to make up the difference

Neither option is fun but the good news is, you can prepare before the shortage hits.

Why October 1st Matters in Texas

In Texas, property tax bills are released each year on October 1st. If your home’s appraised value went up, your property tax bill likely increased too. And when that happens, your escrow account has to absorb the difference.

Homeowners in San Antonio, Cibolo, Schertz, New Braunfels, and across Bexar County should be especially proactive this year, since appraised values have been climbing.

Don’t Forget About Home Insurance

It’s not just property taxes that can throw off your escrow account. If your homeowners insurance premium increased, that can also cause a shortage. With rising construction and replacement costs, many Texas homeowners are seeing higher insurance bills than expected.

What You Should Do Now

Here are three quick steps to protect yourself:

1. Review your escrow account statement from your lender.
2. Compare your 2024 and 2025 property tax bills to see if your taxes increased.
3. Check your homeowners insurance renewal to confirm whether your premium went up.

If you notice an increase, you can add extra money to your escrow account now. By doing this proactively, you reduce the risk of a shortage  and prevent your mortgage payment from jumping next year.

Bottom Line for Texas Homeowners

Don’t wait until your lender sends a shortage notice. October is the perfect time to review your escrow account, your tax bill, and your insurance premium. A little attention now can save you hundreds, or even thousands, in unexpected costs later.