Explaining Increasing Escrow: With 2016 just around the corner, many families are looking at their budgets for next year and wondering how the mortgage payment will fit into their finances. Did your mortgage payment increase even though you have a fixed-rate mortgage? That’s because of an increased escrow payment. With any mortgage, there are two reasons why your escrow could increase:
- Regular Yearly Increase
Your monthly mortgage payment includes more than just the principal and interest on your loan. It also includes money that goes into an escrow account that pays your property taxes and homeowners insurance. It is completely normal for your mortgage payment to go up a little bit every year as property taxes increase. Some of the increase that you’re seeing on your 2016 mortgage payments is simply your mortgage company anticipating that your taxes will rise, and trying to adjust your payment to make sure that your escrow account will have the funds to pay the taxes.
- Increase Due to Escrow Shortage
The reason why our payments are going up more than we are used to is because the mortgage companies underestimated the amount that our property taxes would increase…
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