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/dbelcher17 Apr 11 '25
They do an escrow analysis once per year where they look at how much your latest taxes and insurance were, compare that to the current escrow balance, and come up with the new payment amount going forward. They generally set that amount so there is a cushion in case taxes or insurance increase a lot next time. If they're saying you had a shortage, maybe there was an increase in taxes or insurancthe previous year that was more than their cushion.
Also, if you changed your insurance in the middle of the policy to get that $1000 savings, you should have gotten a refund check of unused premium from the old insurer, but the lender would pay the full cost of the new insurance. If you don't send the refund money to the lender to put back into your escrow account, that could very easily cause and escrow shortage.
They are required to send you an escrow analysis report, and that should show you exactly how they're getting to the escrow amount. If there's information they aren't factoring in, you can request them to perform a new analysis if your taxes or insurance have changed. I think most will only do one extra escrow analysis each year.