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Message
Mortgage payment increase by nearly $500/mo
Posted on 7/29/17 at 7:12 pm
Posted on 7/29/17 at 7:12 pm
Was talking with a friend of mine this week and she mentioned her house note has randomly increased by nearly $500/mo
- Fixed rate mortgage
- Approx loan amount: $238,000
- Prairieville, LA
- No claims on homeowners insurance
- No Major renovations to house (if that matters)
My first response to her after getting the above information was an increase in either property taxes and/or homeowners insurance, but from some very brief research online, I don't see how that could account for nearly $500/mo extra.
She's convinced it has something to do with the way "she filed her taxes". I'm not entirely sure what that means nor do I understand how tax filing would affect your mortgage payment.
I'm genuinely curious as to what else could cause something like this. Does MT have any theories?
- Fixed rate mortgage
- Approx loan amount: $238,000
- Prairieville, LA
- No claims on homeowners insurance
- No Major renovations to house (if that matters)
My first response to her after getting the above information was an increase in either property taxes and/or homeowners insurance, but from some very brief research online, I don't see how that could account for nearly $500/mo extra.
She's convinced it has something to do with the way "she filed her taxes". I'm not entirely sure what that means nor do I understand how tax filing would affect your mortgage payment.
I'm genuinely curious as to what else could cause something like this. Does MT have any theories?
This post was edited on 7/29/17 at 7:16 pm
9
Posted on 7/29/17 at 7:15 pm to dcrews
If she has an escrow account it sounds like she is short when the annual escrow analysis was done.
Maybe the lender underestimated insurance or taxes.
Maybe the lender underestimated insurance or taxes.
Posted on 7/29/17 at 7:33 pm to LSUpetro
quote:
If she has an escrow account it sounds like she is short when the annual escrow analysis was done.
Maybe the lender underestimated insurance or taxes.
MT comes through.
Posted on 7/29/17 at 7:44 pm to LSUpetro
I'll be buying a house before the end of the year. What should I do to ensure this doesn't happen to me? I guess get a lot of different insurance quotes, but how'd they get the taxes so wrong?
Posted on 7/29/17 at 8:38 pm to AaronDeTiger
We bought new construction for our last few houses. The assessor's office usually has the value of the lot for tax purposes. Once it is reassessed, they determine the new value. Our real estate agent and mortgage company said a percentage (don't remember the exact %) of the sale price is a good guideline, and that's what the mortgage company factors in. Our second year in the house has always seen an increase in the amount needed for taxes in escrow. Hasn't ever been a $500/mo jump though. If you are buying a house from a previous owner, they should have a good tax figure based on previous years.
Posted on 7/29/17 at 8:43 pm to liuyaming
she is probably making up the escrow shortage for last year while at the same time paying more so she won't be short again. maybe it will go down when she pays back the initial shortage
Posted on 7/29/17 at 9:10 pm to achenator
I got hit with a big increase like that a few years ago. Insurance went up and technically went up the year before somehow and I had a shortage plus the new insurance rate.
My insurance company couldn't explain it well enough for me so I switched to a new company and ended up saving $50/month.
My insurance company couldn't explain it well enough for me so I switched to a new company and ended up saving $50/month.
Posted on 7/30/17 at 11:09 am to AaronDeTiger
quote:
What should I do to ensure this doesn't happen to me?
Put enough money down to avoid an escrow account. Then you get to pay taxes and insurance on your own and don't have to depend on some other company to do it for you.
Posted on 7/30/17 at 12:34 pm to dcrews
It always amazes me how people can invest in a property worth a quarter million and not completely understand the contract terms.
Posted on 7/30/17 at 12:51 pm to foshizzle
You underestimate the number of people who have their head up their arse regarding finance.
Posted on 7/30/17 at 1:15 pm to foshizzle
quote:
It always amazes me how people can invest in a property worth a quarter million and not completely understand the contract terms.
The DSLD, DL Horton, and Alverez construction companies around the country will build and sell a bunch of low quality, low costs homes to anyone. Some will even have the realtor and financing wrapped up for the buyer.
Posted on 7/30/17 at 2:35 pm to NewIberiaHaircut
What percentage is that? I'm close to 10%
Posted on 7/30/17 at 7:01 pm to dcrews
Has she filed her homestead exemption?
The year after I bought my first house my mortgage went up about $400 because I didn't know I had to file one. Only took 6 months to correct!
The year after I bought my first house my mortgage went up about $400 because I didn't know I had to file one. Only took 6 months to correct!
Posted on 7/30/17 at 10:47 pm to GaryMyMan
Almost certain it's a combination of previously mentioned issues like escrow shortage brought on usually by an adjustment via reassessment after the parish or municipal assessor reassesses the value of the property once the home and its improvements are factored into it. It can adjust annually based on fluctuations in assessments as well as insurance premiums increasing.
Mine did by almost $100 the first year and is adjusting $14 again this year due to a shortage.
Mine did by almost $100 the first year and is adjusting $14 again this year due to a shortage.
Posted on 7/30/17 at 11:00 pm to liuyaming
Same here we built and second year increase by 200 dollars or so.
Posted on 7/31/17 at 8:28 am to dcrews
she needs to do some homework as others mentioned. Find out if it was taxes and or insurance that went up. It is definitely an escrow shortage but does she realize $500/mo is $6,000 a year? That would be enough for me to refinance all together if she can find a decent rate.
Her closing company must have royally screwed up the estimates for the insurance and taxes. I recently bought a house a caught the taxes being half of what they should have been, my broker was like good catch....Wells Fargo did the same to me years back and I refinanced with a broker....screw them.
Her closing company must have royally screwed up the estimates for the insurance and taxes. I recently bought a house a caught the taxes being half of what they should have been, my broker was like good catch....Wells Fargo did the same to me years back and I refinanced with a broker....screw them.
Posted on 7/31/17 at 1:42 pm to bayou choupique
$500 one time seems like in increase in taxes or insurance, but $500 a month sounds like she doesn't have a fixed rate. Is this the 3rd or 5th yr? Maybe she had a 3yr or 5 yr fixed with an ARM
Posted on 7/31/17 at 2:32 pm to dcrews
it's insurance and taxes that made her note go up. The mortgage company didn't estimate anything btw. The client provides the insurance and the title company provides the taxes and the mortgage company just makes sure they get paid on time.
Posted on 7/31/17 at 4:10 pm to dcrews
Did she get a speeding ticket?
I did and my homeowners insurance went up. not $500 per month though.
I did and my homeowners insurance went up. not $500 per month though.
Posted on 7/31/17 at 5:18 pm to LSUpetro
Yeah had this happen with the escrow. So for a year you are paying not only the increased amount but also covering the previous year's shortfall. Double whammy. $500 is a lot though. Definitely needs a closer look.
This post was edited on 7/31/17 at 5:19 pm
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