Shoot! Did Your Mortgage Payment Go Up?

Have you opened your mortgage statement lately and wondered, “Wait… why did my payment go up?” You’re not alone.

I get questions about this every year because a lot of homeowners assume their mortgage payment stays the same. The reality is your principal and interest might not change, but your monthly payment absolutely can. Shocking I know!

Most people have an escrow account built into their mortgage payment. Your lender collects money each month to cover your property taxes and homeowners insurance, then pays those bills for you when they’re due.

The problem is those bills don’t stay the same.

Property taxes go up. Insurance premiums go up. And once a year, your lender does what’s called an escrow analysis to make sure there’s enough money in your account to cover those increases. If there isn’t, you’ll usually get a letter saying you either need to pay the shortage in one lump sum or spread it out over the next year.

Either way, your monthly payment shifts.

If this happened to me, here’s exactly what I’d check first:

📌 Review your property tax assessment. If your home’s assessed value seems too high, you may be able to appeal it. You’d be surprised how many homeowners overpay simply because they never ask.

📌 Shop your homeowners insurance. Rates have changed a lot over the last few years, and staying with the same company isn’t always the cheapest option. Ask your agent to requote your policy, then compare it with another carrier or two. Even a few hundred dollars a year can make a difference.

Don’t panic if you get an escrow shortage notice. You can usually pay the shortage upfront or spread it over the next year. Neither option is wrong, it just depends on what works best for your budget.

And don’t ignore your annual escrow statement. It shows what came in, what went out, and what your lender expects for the year ahead. Spending five minutes reviewing it can save you from an unexpected payment increase later.

None of this is complicated once someone explains it. Unfortunately, the paperwork doesn’t always make it easy. Typical right?

So if you ever get a letter from your lender that leaves you scratching your head, send it my way. I’m always happy to help!

Jan

Your Union County Family Realtor