Property taxes and homeowners insurance can sneak up on your budget, especially when you are settling into a new Nolensville home. If your loan uses an escrow account, your lender handles those big bills for you, but the details matter. You want to avoid surprise payment changes and feel confident on closing day. This guide breaks down how escrows work, local timelines in Williamson County, and the steps to take before and after closing. Let’s dive in.
What an escrow account covers
An escrow account is a lender‑managed account that collects part of your monthly mortgage payment and holds it to pay property taxes and homeowners insurance when due. Your servicer disburses those bills from the escrow so they are paid on time. You will also receive required disclosures that explain how the account is calculated and maintained, as outlined in federal rules under Regulation X. You can review the CFPB’s escrow guidance in Regulation X for details on disclosures, cushions, and annual analysis requirements.
How your monthly amount is calculated
- Add up the annual bills the servicer plans to pay from escrow, such as property taxes and homeowners insurance.
- Divide by 12 to get the base monthly escrow amount.
- The servicer may add a permitted cushion to prevent shortfalls.
- Each year, the servicer performs an escrow analysis and may adjust your monthly payment based on updated bills. See the CFPB’s Regulation X section on escrow accounts for the calculation rules.
Example for illustration only: If annual property taxes are $4,800 and insurance is $1,800, your total escrowed amount is $6,600. The base monthly escrow would be $550. A cushion of up to two months of payments may also be held in the account.
Nolensville tax timing to know
Tennessee law provides that property taxes are due and payable on the first Monday in October each year. In Williamson County, tax notices are typically mailed in October, you can usually pay without penalty through the end of February, and taxes become delinquent March 1. Because timelines can shift each year, always confirm current dates using the Williamson County Trustee tax search and payment tools. The City of Franklin’s property tax information page also reflects the county’s typical October to March window.
- State statute baseline: first Monday in October
- County practice: billed in fall, delinquent March 1
- Action step: verify the current calendar on the county’s site before you plan payments
Initial deposit and cushions
When your lender sets up an escrow at closing, they collect an initial deposit so the account has enough to cover upcoming disbursements. The amount depends on your closing date and the next expected tax and insurance due dates. Federal rules limit the cushion your servicer can keep to one‑sixth of the estimated annual escrow disbursements, which equals up to two months of escrow payments. You are entitled to an initial escrow disclosure at closing and an annual escrow statement each year that shows payments, balances, and any projected shortage or surplus. You can read these requirements in the CFPB’s Regulation X escrow section.
Which loans require escrow
- Government‑backed loans. FHA loans usually require escrows for taxes and insurance. VA and USDA loans often use escrow as well. Learn more about FHA escrow expectations from this overview.
- Conventional loans. Many conventional mortgages require escrow when the down payment is small or the loan carries more risk. Some lenders allow escrow waivers with larger down payments, often around 20 percent, though fees or conditions may apply. See this consumer explainer on escrow accounts and waivers. Always ask your lender early whether escrow is required for your loan.
Questions to ask your lender
- Will you require an escrow account for my loan?
- What is the estimated monthly escrow portion of my payment?
- How large will the initial escrow deposit be at closing?
- How do you handle shortages or surpluses after the annual analysis?
Closing day: who pays what
Property taxes are typically prorated at closing so each party pays their share for the year based on the closing date. If you close before the current year’s bill is issued, the prior year’s tax is often used as the basis, with a later adjustment if needed. This approach is reflected in standard contract language and common Tennessee practice. Title companies calculate these prorations and show credits on the settlement statement at closing. Sellers usually receive any remaining balance in their own previous escrow account after their loan is paid off. If any taxes are delinquent, those amounts are generally cleared at closing.
What you should bring to closing if your loan escrows taxes and insurance:
- Proof of homeowners insurance listing your lender as mortgagee
- Funds for the initial escrow deposit shown on your closing disclosure
- Contact details for your insurance agent so the lender can verify billing
Avoid force‑placed insurance
Keep your homeowners policy active and make sure your lender has up‑to‑date proof of coverage. If a policy lapses, servicers must send required notices before charging for lender‑placed insurance, and the cost is usually higher with limited owner protection. When you have an escrow account, servicers generally must use available funds to maintain your own policy unless they have a reasonable basis to believe coverage is truly not in force. For a plain‑English overview of the federal servicing rules and notice requirements around lender‑placed insurance, review this summary.
Your action checklist
- Confirm the current tax calendar on the Williamson County Trustee tax search.
- Review your loan estimate and initial escrow disclosure for monthly and upfront escrow amounts.
- Set reminders for your annual escrow statement and scan it for any changes.
- Coordinate with your insurance agent to prevent coverage gaps and notify your lender of any changes.
- Ask your title company to walk you through tax prorations before closing so you know what to expect.
Buying or selling in Nolensville should feel organized and clear, including how escrows handle your biggest home bills. If you want a concierge, design‑forward experience that keeps the financial details on track, connect with Shonte’ Walton for local guidance tailored to your goals.
FAQs
What is a mortgage escrow account in Nolensville?
- It is a lender‑managed account that collects part of your monthly payment to pay property taxes and homeowners insurance on time, governed by federal rules in Regulation X.
When are Williamson County property taxes due?
- Tennessee’s baseline due date is the first Monday in October, and in Williamson County bills typically arrive in October, are payable without penalty through February, and become delinquent March 1; verify current dates on the county’s tax search and the county’s property tax info page.
Who pays property taxes if we close in summer?
- Taxes are prorated so the seller typically pays through the closing date and the buyer covers the rest of the year, with the title company calculating the credit on your settlement statement based on the most recent bill or prior year amounts.
Can I waive escrow on a conventional loan?
- Sometimes, often with a larger down payment such as 20 percent, but it depends on lender and investor rules and may include a fee or conditions; ask your lender and review the escrow details in your loan estimate.
How much will my lender collect for escrow at closing?
- Enough to cover upcoming tax and insurance due dates plus a permitted cushion of up to one‑sixth of the annual escrowed amount, disclosed in your initial escrow statement under Regulation X.
Does my escrow account earn interest in Tennessee?
- Federal law does not require it and Tennessee is not generally listed among states that mandate interest on escrow balances, so check your loan documents to see if your servicer pays interest.
What if my homeowners insurance lapses while I have escrow?
- Your servicer must send required notices before charging for lender‑placed insurance and should generally use available escrow funds to keep your policy active when possible, but force‑placed coverage is expensive and limited so keep your policy current.
