Does anyone's mortgage payments go up due to escrow? help!

[gm]

I need help from my fellow dis friends!!

Okay, my mortgage is $1250 and they just did an annual escrow checkup and said I was short $470 in my escrow and that I could either pay that in a lump sum and my new mortgage payment will be $1296 or I can pay it in a 12 month installment which would make my mortgage $1337.xx for 12 months and than $1296.

I can understand that county, mud, or school taxes go up but does that mean that my mortgage payment has to go up also. I thought that what you signed at closing is what you pay for 30 years and if taxes do go up they can give us an option to pay the additional amount to escrow in a lump sum correct?

Well I called my mortgage company and they said that by law they have to raise the mortgage payment after analyising estimate taxes will be next year so they raised my mortgage payment an additional $40 for escrow.

Has this happened to anyone and how many times has your mortgage payment been raised even though escrow was short and you made a lump payment or installments.

I would so greatly appreciated some input on your experiences.

 

[doxdogy]

Yes it has happened to us. One year we actually received a refund because we paid to much into escrow. We just dealt with the extra amount on the mortgage since it wasn't much. Our house payment is still under $700 a month.

 

[Blondy876]

Ours did the same thing. But the mortgage payment is the same it's a shortage in the taxes, (that's they money that goes into escrow to cover all the tax bills) If the taxes go up too high and you don't have enough in escrow you have to pay more. Ours was short about $350. We choose to pay each month which increased our bill by $40. It will most likely increase each year.

 

[Alice28]

This just happened to us 2 months ago; I have to add on $40 a month for the next year. I think it's due to property taxes and such going up.

 

[LucyStorm]

We have had our house 8 years and it has happened every single year. Could be property taxes or insurance, etc going up......

 

[Disney1fan2002]

Yes, it happened to us. Used to frustrate the heck out of me.

Your mortage payment is not going up. That stays the same P&I. It is the escrow payment that is making your monthly payment to your mortgage company go up. Every time your taxes go up, you will have to pay more.

In the future, try to see if you can send extra money each month, and have them apply it to your escrow account. That should keep the escrow "padded" enough to cover any tax hikes.

 

[DawnCt1]

The actual mortgage payment doesn't change, unless you have a variable rate mortgage, BUT you are having your taxes escrowed and that can always change. It can change year to year as the mil rate/tax rate is adjusted. The $470 isn't money you "owe" to the bank but to the town. The bank is offering you an opportunity to pay it gradually, thus raising the amount you pay on a monthly basis or the option of the lump sum payment to the bank, The choice is yours. Conversely, the bank can discover that they collected too much. Our escrow dropped and I recieved a "surprise" check for $1200. I have Washington Mutual and of course I wouldn't have known that they "sent" me a check unless I noticed that I was paying less on my monthly mortgage bill than I paid the month or two? before. I called and they told me that they sent me a check. I never got it and had to call for a replacement.

 

[floridafam]

Happened to us, too. There is nothing you can do about it.

We knew it was going to happen. We asked at closing if we could just start making a bigger payment (becasue we knew the property taxes were going to rise due to the fact that the house hadn't been assessed in 40 years.)

Sorry.

 

[4nana]

Yep, big increase every year. Finally we requested, we are very capable of being responsible for our own RE tax and ins. Now we get the bills and can see what is actually due and when w/no worries or hassels of escrow.

 

[RitaZ.]

I need help from my fellow dis friends!!

Okay, my mortgage is $1250 and they just did an annual escrow checkup and said I was short $470 in my escrow and that I could either pay that in a lump sum and my new mortgage payment will be $1296 or I can pay it in a 12 month installment which would make my mortgage $1337.xx for 12 months and than $1296.

I can understand that county, mud, or school taxes go up but does that mean that my mortgage payment has to go up also. I thought that what you signed at closing is what you pay for 30 years and if taxes do go up they can give us an option to pay the additional amount to escrow in a lump sum correct?

Well I called my mortgage company and they said that by law they have to raise the mortgage payment after analyising estimate taxes will be next year so they raised my mortgage payment an additional $40 for escrow.

Has this happened to anyone and how many times has your mortgage payment been raised even though escrow was short and you made a lump payment or installments.

I would so greatly appreciated some input on your experiences.

Yes, they can go up. The principal and interest portion of the payment remain the same for the life of the loan, in your case $1250. They are only increasing the escrow portion, which includes everything, but P&I. As long as they project an increase in taxes, insurance costs, etc., they will increase the amount of your escrow payment, which increases your total mortgage payment. Sometimes you can also have an overage in your escrow account, in which case you get a refund when they do the yearly analysis. Does that make sense?

 

[Lisa loves Pooh]

Every year....we just can't keep up--we'd add more to the escrow, but we are too busy paying the shortage. For us it is Home Owner's Insurance that does us in.

 

[Buckalew11]

Happened to me in Jan. I had to pay about 670.00 so my payment would only be up a few dollars. A few years ago I received a check from them. I did no complaining that year!! There is a big subdivision going up across the street from me and the houses are huge and expensive. Everyone said I'd notice a difference. Yikes!

 

[jel0511]

Yes, this is the problem with escrow. Your mortgage payment (the principal and interest portion) isn't going up, it's the escrow portion. When you go into a mortgage, if you put less than 20% down, you have to excrow your mortgage and homeowners, if you put more than 20% down they offer you the service. Escrow, ensures the mortgage company that your taxes and homeowners are getting paid, and your house won't have a lein on it if they have to foreclose the loan. Taxes and homeowners usually go up year to year, and the escrow portion of your payment will go up year to year. Be lucky you don't live in NJ. In NJ, the mortgage companies are ALLOWED to charge you an additional 10% of your total tax and homeowners to assure there won't be a deficit and you owe them money. They also don't have to refund that 10%, they can keep it in the account. Basically earning interest on your money. You'll see this adjustment annually, and have the option of paying the deficit in one lump sum, or paying it out over the year. You might also see your payment changed for next year, if your taxes go up again.

We don't pay escrow, but if we did, last year alone our taxes went up by $700 for the year, so we'd have a deficit and then have to pay that additional $700 for the next year.

 

[orvilleair]

Had my mortgage since 1993 and experienced annual escrow increases due to property taxes and homeowner's insurance rate changes. In 2004, I refinanced due to lower rates and now I pay P&I only. I am now billed on Property Tax and Insurance from the County and insurance company separately from the mortgage company.

Our County has the property tax on the internet so you can check your tax rate and your appraised home value. Sometimes you pay more property tax, because your home's value has gone up (good neighboorhood, schools etc...).

 

[poohandwendy]

Taxes raise, so does the mortgage (if you pay your taxes via escrow)...bummer eh? BTDT, sure it will happen again soon...

 

[chobie]

Yep, happened to us almost every year for the first 5 years we owned the house. The first year was because they originally underestimated the property taxes by half.

 

[zurgswife]

They under estimated my escrow so much that my payment went up perminantely $380 per month....can you say OUCH!!!! A very unhappy camper here....

We were in the hole and they say that they need to have a 3month cushion....

 

[Christine]

Happens every year.

My mom avoids big jumps because she pays her tax bill and homeowner's insurance on her own (not part of her mortgage payment) and does not have an escrow account.

 

[bumcat]

You could choose not to have an escrow acct. as long as you can trust yourself to put the money away. We started doing our own last year. I like it much better.

 

[DrCavin]

Yes, this is the problem with escrow. Your mortgage payment (the principal and interest portion) isn't going up, it's the escrow portion. When you go into a mortgage, if you put less than 20% down, you have to excrow your mortgage and homeowners, if you put more than 20% down they offer you the service.

This must be different for each state, because escrow is an option everytime I have done a home loan. Could pay the taxes & insurance myself or allow the mortgage co, to take approx 1/12 of it each month.