Do You Get an Escrow Refund When You Refinance in Florida?

When you refinance in Florida, your old escrow account is closed — and any leftover balance is refunded to you.

This often-overlooked benefit can mean hundreds or even thousands of dollars back in your pocket.

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Here’s how escrow refunds work, Florida’s rules, and the smartest ways to use the money.

Why an Escrow Refund Happens in the First Place

Every month, part of your mortgage payment goes into an escrow account.

Your lender uses it to pay property taxes and homeowners insurance on your behalf.

To stay compliant, lenders also keep a “cushion” — extra money in case bills rise.

Why surpluses build up

• Overestimated bills: If your property taxes or insurance premiums turn out lower than projected, you’ve been paying in too much.

• Timing quirks: Florida’s tax cycle (Nov–Mar) and mid-year insurance changes can leave unused money sitting in escrow.

• Cushion rules: Lenders are allowed to keep up to 2 months of reserves. Anything beyond that is surplus.

Federal law on refunds

Under RESPA (12 CFR § 1024.17), servicers must refund surpluses of $50 or more within 30 days of an escrow analysis.

If the surplus is less than $50, they can credit it toward your next year’s escrow instead.

Florida’s extra layer

Florida law (Fla. Stat. § 501.137) requires lenders to pay taxes and insurance from escrow on time.

If your account ends with extra after a payoff or refinance, that balance must be returned.

If there’s a deficiency, the lender must notify you within 15 days.

What Happens to Your Escrow When You Refinance in Florida

When you refinance, your old mortgage is paid off — and the escrow account tied to it must be closed.

The lender then calculates what’s left.

Refund vs transfer

• Refund check: Most lenders cut a check directly to you within 20–30 days.

• Credit/transfer: Some Florida lenders (e.g. credit unions) apply balances under $50 to your new escrow account instead of refunding.

When you might not see a refund

• If your escrow balance is very low (< $50).

• If you’re behind on taxes/insurance and the lender uses the surplus to cover arrears.

• If a final tax or insurance bill is still pending — the lender may hold funds until it clears.

How Long Does It Take to Get Your Escrow Refund?

• Federal rule of thumb: Refunds within 20 days after mortgage payoff; 30 days after an escrow analysis.

• Florida practice: Many lenders process in ~2–3 weeks, but delays can happen around property tax cycles or hurricane-season insurance updates.

• Action tip: If 45 days pass with no refund, send a certified letter requesting your “short-year escrow analysis” and payment.

Smart Ways to Use Your Escrow Refund in Florida

• Pay down high-interest debt: A $2,500 refund applied to a 19% credit card could save ~$475 in interest in a year.

• Boost your emergency fund: Hurricane season alone is reason enough for Floridians to keep cash reserves.

• Make an extra mortgage payment: Even one lump-sum principal payment can shave months off your loan.

• Tackle Florida-specific home costs: Upgrade hurricane shutters, roof reinforcement, or HVAC.

How to Claim or Track Your Escrow Refund in 5 Steps

1. Request your “short-year escrow analysis” after refinance.

2. Compare billed vs. collected amounts.

3. Confirm surplus and refund eligibility ($50+).

4. Ask for refund in writing if not automatic.

5. Escalate to CFPB or Florida regulators if delayed.

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Frequently Asked Questions About Escrow Refunds When Refinancing

Homeowners often have the same questions when it comes to escrow refunds after refinancing. Here are clear answers to the most common ones.

Do you get an escrow refund when you refinance?

Yes. When your old loan is paid off, the escrow account tied to it is closed and any surplus funds are refunded to you, usually within 20–30 days.

Who gets the escrow refund?

The refund goes directly to the homeowner listed on the loan after the lender finalizes the payoff and closes the old escrow account.

Do you get money back after refinancing?

You can get money back in two ways: from an escrow refund when your old account is closed, or through a cash-out refinance where you borrow against your home equity.

What happens to your old escrow account when you refinance?

The old escrow account is closed, the balance is calculated, and any extra funds are either refunded or applied to your new loan if you choose “netting.”

Why did my mortgage company send me an escrow refund?

It means you had a surplus in your account — often from overestimated property taxes or insurance costs, or because you refinanced or paid off your mortgage.

When should I expect my escrow refund after refinancing?

Most lenders issue refunds within 20–30 days of closing, but federal law allows up to 30 days after the escrow analysis.

Does escrow go away after 20% down?

With conventional loans, once you reach at least 20% equity, you may be able to remove escrow, but many lenders require it until that threshold is met.

What happens to escrow after a mortgage is paid off?

If you pay off your mortgage entirely, the escrow account is closed and any remaining funds are refunded to you.

Is an escrow refund considered income?

No. It’s your own money being returned and is not treated as taxable income.

What can I do with my escrow refund?

You can use it however you want — common options include paying down debt, boosting savings, covering home improvements, or making an extra mortgage payment.

The Bottom Line

Refinancing in Florida isn’t just about lowering your rate or payment.

It can also unlock a check you didn’t know was waiting.

By knowing your rights, watching the timelines, and putting that refund to smart use, you can turn refinancing into a win-win.

👉 Ready to see if an escrow refund could be in your future?

Schedule a quick call today and let’s check your numbers together.

Check Your Florida Home Refinance Eligibility