Your first payment is due the following month after closing.  For example, if you close in August, your first payment is due October 1^st. If you close in March, your first payment is due May 1^st.  This creates a gap and thus a shortage from when you start accruing escrows and from when your payment is made.  Because of this, homebuyers are required to pre-pay 2 to 3 months of property taxes along with homeowners’ insurance at closing to buffer their escrow account with the intention of eliminating any escrow account shortages.  At the end of year any surplus monies are refunded to the homeowner.