FAQ - Mortgage Loans Questions

  1. If your old policy hasn’t expired when you cancel, you may receive a refund check. If the insurance company pays you directly, you will need to forward the check to Gate City Bank for deposit into your escrow account. Without the refund, there will be a shortage in your escrow account. This may cause an increase to your monthly mortgage payment.  You can mail your check or stop by your local Gate City Bank to have it placed in your escrow account.

    Once you receive your refund, please endorse the check with “For Escrow Deposit Only” along with ALL applicable signatures. Then, please mail the check to the following address:

    Gate City Bank
    PO Box 2847
    Fargo, ND 58108

    Please be advised that switching insurance and/or switching effective dates may alter your original escrow calculation. This could result in an additional increase or decrease to your monthly mortgage payment. Once Gate City Bank knows your refund has been placed in your escrow, we will look at your account to determine if your account should go through analysis.

    If you have any questions, please feel free to call 701-293-2543, or 877-243-0827.

  2. If you decide to change insurance companies, you must let your old insurance carrier know that your policy needs to be cancelled. You must also notify Gate City Bank that you are switching insurance companies or have your agent call us with the new information. When this information is received, we will update your file. If you escrow for insurance we will pay for your new policy. You can contact us at 877-243-0827.

  3. Yes. Additional amounts can be made, however if your tax and/or insurance payments do not increase, your account will have a surplus. This overage will be refunded to you during your annual escrow analysis.

  4. No. By federal regulation, we are required to refund any surplus over $50, based on your anticipated payments.

  5. No. Mortgage escrow accounts are maintained free of charge.

  6. A shortgage is the amount your mortgage escrow account is under the required minimum balance needed in order to pay all items in the following year.

  7. Your mortgage escrow payment is composed of three portions:

    1. The anticipated amount needed to make your tax and/or insurance payments in the coming year.
    2. A cushion to cover two months of anticipated payments.
    3. Catch-up amounts for a shortage (if applicable). A shortage occurs when the amount that was paid for taxes and/or insurance increased from what was anticipated. The anticipated amount is always the amount of the prior year's payments.
  8. It depends. Some mortgage loans are required to have a mortgage escrow account, where we pay the tax and/or insurance payments. Please contact us to discuss your options. In general, any of the below conditions require you to have a mortgage escrow account:

    • If your Loan-to-Value (LTV) is over 80%
    • If your mortgage loan has an active Private Mortgage Insurance (PMI) policy
    • If your mortgage loan has Rural Housing insurance
    • If you have a VA mortgage loan
    • If you have an FHA mortgage loan
    • If your mortgage loan has required flood insurance, you must escrow for the flood insurance
  9. No. There is no charge or penality if your mortgage escrow account is short.

  10. Your shortage is spread over 12 months in your mortgage ecrow payment, at no charge.

  11. An account used to pay for items related to your property such as taxes and insurance, and is a calculated portion of your monthly mortgage payment.

  12. An annual evaluation by your bank to determine if you are paying the right amount in taxes and insurance into your mortgage escrow account, which can result in changes to your monthly payment.