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

[QuiltTeddy]

Let me preface by saying I didn't read through the entire thread and am responding to the OP. The mortgage companies/banks are required, by law, to do an annual "escrow analysis". This either results in everything being the same (which is highly unlikely as insurance and taxes rise), a shortage (because they didn't escrow enough monthly to cover the insurance and tax payments) or an overage (where they have more in the escrow account than is permitted by law) and you will receive a refund. Hope that helps.

 

[Mom2Ashli]

Yep We just had that happen to us. We could pay the $400 we were going to be short or just pay $30 extra every month. I chose to have my payment change.

 

[ahutton]

Our mortgage payment went up too - $36. For us it wasn't taxes it was homeowners insurance. The bummer is they paid to renew the policy we cancelled, and have not paid the policy we requested saying they only make one insurance payment a year. So now I'm paying the higher mortgage payment, waiting for a refund from the "wrong" insurance company and paying the right insurance company out of pocket. I guess the plus is this year my escrow account will be way over (I got lucky doing my insurance shopping and this policy is the same coverage for 1/2 the price) and I'll get a refund this time next year, just in time for spring break vacation...

 

[Chicago526]

I have my taxes escrowed, but not my home owners insurance. I don't pay mortgage insurance since I've got 20% equity in the house. I find it easier to send the mortgage company 1/12 of my tax bill each month, rather than paying the county 1/2 every six months!

My taxes just went up about $350 for the year (not bad considering my home value went up 50% in three years, I think I can live with that!), and the mortgage company offered that I either send them the shortage, or they'd divide the shortage by 12 and just raise my monthly payments. I didn't have $350 at the time, so I just let them raise the payment. Either way I pay the same amount, so why worry?

 

[Galahad]

Yep. We usually play the lump sum. Once it went up because of the morgage company's estimate of a "new" home owners insurance rate. We paid the lump sum and then the insuurance didn't go up. It meant our next property tax adjustment was smaller though.....

 

[inaminute]

You could choose not to have an escrow acct. as long as you can trust yourself to put the money away.

We didn't have a choice with a VA loan. That was about 12 years ago, though. I don't know if they've changed that requirement since then.

 

[4nana]

We pay all bills on line and have it set up for CU to auto deduct our mo mortgage pmt. When we refinanced for a much lower rate, we chose to have the HO ins. and RE tax deductions auto deducted fr our acct. mo and transferred to savings. When those 2 bills come, we simply write the cks. Our house has quadrupled in value and ins sky-rocketed because of tornados in area. We didn't like the idea of not having any control and CU holding our monies w/o interest and waiting months for any escrows to be returned. Living on a fixed income, now we have plenty warning to see where we need to economize.

Now, IF our CU would only allow our HP to be paid bi weekly, we'd save thousands!!!

 

[Mr.BsMom]

This has happened to us several times. The worst one was when we built our first house 7 years ago... At closing, the bank would only set up the escrow account using the latest appraisal on the property. At the time they did it, the property was just land - no house. Well, the next year they re-evaluated our account and checked the value of the property then. By that time, of course, there was a structure on it which significantly raised the total value of the property. Our payments were going to go up about $600 a month to cover it (and prepare for the next year). Talk about a shock!! Fortunately, we got our income tax refund and used that to pay for it as a lump sum. Our monthly payments still went up a bit to prepare for the next year, but it wasn't as bad as it could have been.

 

[Crankyshank]

We didn't have a choice with a VA loan. That was about 12 years ago, though. I don't know if they've changed that requirement since then.

We got our house through a VA loan in 2002 and also didn't have a choice

 

[snoopy]

The same thing happened to us. I didn't really understand it and gave it to DH, who paid it in a lump sum.