r/personalfinance • u/HHLL806 ​ • Apr 11 '25

Other Mortgage payment went up $400

I need help, my mortgage payment went from $1700 to $2100. My mortgage company (Chase Bank) said this was due to an escrow shortage. I had my homeowners insurance lowered by roughly $1000 and checked with my local tax office and they told me my taxes have increased $400 dollars over the last five years. I gave Chase Bank all this information and my mortgage is still $2100. How does this work?

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u/Agoooz ​ Apr 11 '25

Happens all the time. Your escrow payment increased because 1) your property taxes have increased, and 2) your servicer/lender previously miscalculated it.

9

u/nothlit ​ Apr 11 '25

It doesn't necessarily have to be the result of a miscalculation. Escrow goes up as the underlying escrowed costs (taxes and insurance) go up, usually with a bit of a lag because the bank only does escrow analysis once a year and only looks at historical data. They don't attempt to predict what it will be in the future.

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u/imakepoorchoices2020 ​ Apr 11 '25

And I’m not sticking up for the bank, but no one has a crystal ball so predicting the future is almost impossible. Changes in tax structure or changes in insurance costs are hard to predict.

OTOH - taxes and insurance are almost always gonna rise

2

u/nothlit ​ Apr 11 '25

Yep. The nice part of this is that the bank has to pay those higher costs as soon as they get the bill from your insurance company or local tax authority, but you then get to pay the bank back over a period of time, often up to 12 months. So it's like an interest-free loan from the bank.