
"Once you buy a home, you expect your mortgage payment to stay steady, especially if you have a fixed-rate loan. But for many homeowners, the amount due each month can creep up over time, leaving you asking: "Why did my mortgage payment go up?" Whether you're paying off a home in Denver, CO or managing your home in Orlando, FL , this Redfin article explains the most common reasons mortgage payments rise, plus steps you can take to lower them."
"Escrow account changes Most lenders set up an escrow account to collect money for property taxes and homeowners insurance. If those bills go up, your lender increases the escrow portion of your payment, even though your principal and interest don't change.Each year, lenders perform an escrow analysis-and if there's a shortfall, your payment will rise to cover the difference."
"Local governments can reassess your home's value , raising your property taxes. If your tax bill increases, or if you lose a property tax exemption, your escrow contribution goes up, too. That change gets passed directly into your monthly mortgage. Example: If your escrow account is short $240, your lender may add $20 per month to your mortgage for the next year."
Mortgage payments can rise even without missed payments because the escrow portion—money collected for property taxes and homeowners insurance—can change while principal and interest remain the same. Lenders perform annual escrow analyses and raise monthly payments to cover shortfalls. Local governments can reassess home values or revoke exemptions, causing property tax increases that raise escrow contributions. Homeowners insurance premiums can increase after switching providers, adding coverage, renovating, or due to regional climate-related claim trends. Lenders pass higher tax or insurance bills into monthly payments, often spreading an escrow shortfall across twelve monthly installments.
Read at Redfin | Real Estate Tips for Home Buying, Selling & More
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