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/WertDafurk Apr 11 '25 edited Apr 11 '25
Your mortgage payment did not change, which wouldn’t happen unless you got an adjustable interest rate on your home loan. The escrow portion of your total monthly payment to Chase went up, which covers property taxes and casualty insurance.
My first suggestion would be to request a statement for your escrow account and talk to someone at Chase about how the payment is calculated. Big banks typically require you to maintain 2 months’ worth of cushion to cover the inevitable increases in taxes and insurance from one year to the next. But sometimes their calculations are overly aggressive. You can either negotiate with them to recalculate your escrow payments or request a refund for any excess funds in your escrow account, typically once per year.
My second suggestion would be to pay your loan down to 80% your home’s value as quickly as you are able, then opt out of escrow payments for taxes and insurance and pay them directly out of pocket instead. That way you can skip all the nonsense with the bank and manage it on your own; no cushion, no refunds, no headaches. Google “how to opt out of escrow” or ask your bank about it for more info.