What is an Aggregate Adjustment?

I am always asked this question at closing and when we go through our Good Faith Estimate and our initial consultation.

Even though we explain it clearly and precisely to our clients it still causes some acid re-flux just as does explaining APR so as I was asked yesterday twice at closing, I thought I would give everyone a very clean clear and simple explanation to help borrowers, sellers and agents have a reference point.

Hope this helps:

An aggregate adjustment determines the amount of money placed in a borrower’s escrow account at closing. The purpose of the aggregate adjustment is to ensure that the borrower’s escrow account maintains the necessary balance throughout the year; particularly when taxes and insurance are paid. In many cases, the aggregate adjustment is a credit that benefits the borrower by guaranteeing the escrow account does not hold unnecessary funds.

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