An aggregate adjustment is a payment into an escrow account that is designed to top it up to a required level. In some cases, the aggregate adjustment may come in the form of a credit from an account that has surplus funds. Two of the most common forms of aggregate adjustment involve real estate purchases and mortgages.
Escrow is an arrangement in which money is to change hands between two parties but is temporarily held by a third party. This could be done to make sure contractual obligations are met by both sides, to comply with obligations such as tax payments, or to make sure money is in place even if the precise details of a transaction may vary. A simple example of escrow in action is where an online auction buyer pays money into an escrow service, with the money released to the seller once the goods are delivered, or returned to the buyer if they are not delivered.
While simple escrow accounts may involve only a single payment, more complex ones may involve multiple payments or withdrawals. Depending on the reason for the escrow account, the person paying in may be required to maintain a particular minimum balance. If the balance drops -- for example, if money leaves the account -- an aggregate adjustment is the required payment to bring the balance back up to the minimum. In some circumstances an aggregate adjustment could mean the person who normally pays into the account receives money back -- for example, if the expenditure from the account is lower than expected and thus the balance in unnecessarily high.
"Aggregate adjustment" can refer to the payment itself, or the relevant entry on the statement for the account.
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In many real estate transactions, the money for the purchase is temporarily held in escrow. This is designed to prevent the buyer from pulling out of the deal, while making sure the seller gets the money once the deal is complete.
In this context, the aggregate adjustment takes account of transactions other than the purchase price. Most commonly this will involve payments the buyer makes at a separate time -- for example, the earnest money payment used in many states that acts as a deposit. In these circumstances, the aggregate adjustment will therefore be a reduction of the outstanding money owed to complete the purchase.
Many mortgage lenders will require the borrower to set up a separate escrow account for mandatory payments that will not go to the property seller. Examples include pre-payments for home insurance or property taxes; lenders often want to make sure this is in place so that the property is better protected.
In this context, the aggregate adjustment is the difference between the total amount the person owes in this way once the house purchase is completed, and any initial payment the bank required the person to put into the account. Usually, therefore, the adjustment means deducting the initial payment to find the amount still owed.