A shortage in my escrow account. What should I do?

[Amun Chiong]

Good afternoon, I recently turned my primary residence into a rental property. During the process, I was notified by my bank that I had a shortage of the amount that was due or it would be spread out for the next 12th months. My escrow account wasn't able to cover the amount because of an increase in property tax. I was able to pay some of the shortage down and was going to pay the rest off. However, I got my statement saying how much my mortgage would be for the next 12 months including the shortage amount. It came out to the exact amount my tenants are paying for rent. I started thinking maybe I could just let them pay off the shortage amount and forget about paying the shortage off right now. Is this a good idea? Either way, I was going to pay it but instead, my tenants are paying the shortage spread for the next 12 months.

[Jonathan R McLaughlin]

This is common and is essentially the bank saying “we are going to collect the new tax amount” and giving you the option to lend them the money by paying it early :) 

Just spread it out over the 12 months as your new baseline. Won’t be the last time.