the_journeyman3 t1_iybmtji wrote on November 30, 2022 at 4:40 AM

I'm amazed how many people purchase a home and don't understand how property tax and insurance are paid.

NachoDog1000 OP t1_iyboh0h wrote on November 30, 2022 at 4:55 AM

The tax increases are not in the 30 year amortization schedule in my mortgage agreement, it's not obvious to a new homeowner. $600 a month increase feels extreme to me.

sephiroth3650 t1_iycr684 wrote on November 30, 2022 at 1:00 PM

Your lender doesn't control your property taxes or insurance rates. There is no way for them to guarantee those items in your mortgage agreement. If you don't like the idea that the escrow portion will fluctuate, then pay your taxes and insurance separately from your mortgage.

the_journeyman3 t1_iybomna wrote on November 30, 2022 at 4:56 AM

Property taxes aren't amortized. Loans are. You really don't seem to have even the slightest clue how this all works. Did you not understand that property tax is a thing? Insurance is a thing?

NachoDog1000 OP t1_iybpaqt wrote on November 30, 2022 at 5:03 AM

I know a lot about other types of lending but not mortgages. The payment on a fixed rate student loan never changes. I assumed mortgages worked the same, but learned that was incorrect when my monthly payment increased $30 in the second year.

A $600 increase seems really steep for me. Wouldn't you be surprised if your housing payment increased by $600?

sephiroth3650 t1_iycr0la wrote on November 30, 2022 at 12:59 PM

Mentally, you're combining your mortgage portion of the payment with the escrow portion. They are separate, and that's why your total monthly payment can fluctuate if you pay them together. The actual mortgage terms didn't change. The portion of that payment going towards the mortgage isn't changing. When you pay taxes and insurance in escrow, you have them tacked onto your mortgage payment. So if the taxes or insurance go up, that add-on amount goes up accordingly. Contact your lender and verify why they saw a shortfall. Did your taxes go up? Did your insurance? Both? Did they send you an escrow analysis with this notice, which would be the typical process? If so, what does the analysis show? Where is the account projected to be short?

flames_of_chaos t1_iybwc8i wrote on November 30, 2022 at 6:17 AM

If there's an adjustment on escrow the lender should of sent you paperwork regarding an escrow analysis, whether if you have a shortage or a surplus and a total breakdown. This year I had a surplus, they issued a check and lowered my total mortgage cost by $19 a month.

the_journeyman3 t1_iybpja9 wrote on November 30, 2022 at 5:05 AM

You don't even know if it $600 a month for x months yet. You need to get that info. Again, it is your responsibility to understand what you are getting into when you buy a house. Did you not understand the concept of property tax? How are roads maintained? How are schools funded? How are the police paid? How about libraries? Where do you think that money comes from.