My monthly mortgage payment including taxes and insurance increased significantly and I do not know why. Can you explain the reasons why your mortgage payment can increase?
The reasons your monthly mortgage payment would increase are: 1) if you have an adjustable rate mortgage (ARM) or interest only mortgage and your mortgage rate increases, 2) if you have an escrow or impound account and your property taxes and homeowners insurance increases or 3) if you have a negatively amortizing mortgage and your mortgage balance increases. If you obtained your mortgage within the past eight years then it is unlikely that you have a negatively amortizing mortgage because those loan programs are no longer available.
If your monthly payment is increasing because your property taxes and homeowners insurance have increased, you can try to find less expensive insurance or potentially submit an appeal to reduce your property tax assessment. Please note that if your impound or escrow account was deficient, your required monthly payment may increase temporarily to address the deficiency. I recommend that you contact your lender and request that they provide a monthly mortgage history that shows an itemized breakdown of your mortgage payments including principal, interest and escrow payments such as property tax, homeowners insurance and any other applicable charges that may have contributed to the overall increase in your monthly payment. The mortgage history also shows the escrow account balance and when property tax, homeowners insurance and other applicable payments are made from the escrow account. The mortgage history also indicates if and when the escrow account became deficient.
If you have an adjustable rate mortgage or interest only mortgage that means that your monthly mortgage payment may increase in the future if mortgage rates continue to rise. You can determine what type of loan you have by reviewing your mortgage note.
If you have an adjustable rate mortgage or an interest only mortgage you may want to consider refinancing into a fixed rate mortgage. The mortgage rate and monthly payments for a fixed rate mortgage do not change or increase over the life of your mortgage. You can use our mortgage refinance calculator to determine if you can save money by refinancing.
We also recommend that you contact multiple lenders to understand how they would handle your unique situation. You can review lenders in your area by clicking INTEREST RATES We advise you to contact at least four lenders as qualification guidelines vary.
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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click here for more information on rates and product details.
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