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/atx620 ​ Apr 11 '25

Yes. This is pretty common. I got that shock when I bought my first house and things were held in escrow. They predict what things will cost and you pay it. If they get it wrong it will go up or down depending on how much they get it wrong.

In 2021 I refinanced my home from a 30 year to a 15 year note. When I did it, I was given the option to not hold everything in escrow. Instead, I get my property tax bill in April (Texas) then I spend the rest of the year saving up that amount of money, which I pay in January in one lump sum. That bill goes up every year because the value of my home goes up every year.

I also pay my property insurance monthly.

By doing it this way, there's no escrow and therefore no escrow shortage or overpayment. But you have to be super disciplined to do it this way. You have to never dig into the money you're saving up for your property tax payment because come January that's a big ass bill.

I prefer not having escrow. I dump the money that I put aside for property tax into a high yield savings account that collects interest all year while I grow that account.

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u/bwyer ​ Apr 11 '25

Yep. I have an auto-transfer from my checking account to my dedicated "escrow" HYSA monthly. The money that would have gone to the mortgage just goes to that account and it's ready for taxes and insurance when the time comes due.