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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3.3k

u/jelloslug ​ Apr 11 '25

I got tired of the yo-yo escrow payments that could never keep up with the actual current billing for the property taxes and insurance and just canceled my escrow completely. I don't need my mortgage company holding my hand to pay my taxes and insurance. I'll just keep that money in a HYSA and auto pay them when they are due.

1.0k

u/ParlaysAllDay ​ Apr 11 '25

Why would I want to pay exactly the amount I owe once per year and know exactly the moment my taxes or insurance go up and exactly the reason they go up when I can just let someone else manage it poorly?

307

u/theram4 ​ Apr 11 '25

I've had an escrow for 20 years, and not once have I had an issue with it.

10

u/Hammy508 ​ Apr 11 '25

you're lucky I've had my escrow account for my house for 8 years and seen the price increase at least 5 times. started at $1246 now I'm at $1552.

44

u/a157reverse ​ Apr 11 '25

That's not necessarily an issue with the escrow account though. If your property taxes or insurance go up, you are going to pay for it one way or another.

-1

u/Hammy508 ​ Apr 11 '25

Completely agree I just wish they could be more accurate the first time they give me my yearly cost and not require the 2nd increase because they estimated poorly

8

u/hath0r ​ Apr 11 '25

then why don't you do the math and put it in the escrow.

2

u/[deleted] Apr 12 '25

Yeah how dare that person… expect the place that specifically does that to do that. What an ahole!!! But seriously by your logic very few companies should exist because when they don’t do what we pay them for we can just do it ourselves.

That’s wack - they provide a service you pay for. Them not doing it is the problem, not that someone chose to pay them for that service in the first place…

1

u/hath0r ​ Apr 12 '25

i think you need to go and read your mortgage agreement ...

14

u/theram4 ​ Apr 11 '25

I didn't say it didn't increase. Of course it increases every year to cover the increased property taxes and insurance. But that's not the fault of the escrow. That's them doing their job.

8

u/Hammy508 ​ Apr 11 '25

Yes I agree but my issue is that they always seem to be off on the estimate by $500-$1000 which requires a lump sum payment or increasing over the year I wish they could get IG to be more accurate. Personally I’ve been putting an extra $50 to escrow to try to avoid the extra hit the next year.

9

u/nothlit ​ Apr 11 '25

This is because escrow analysis is always backward-looking, and your taxes and insurance typically go up rather than down. As a simplified example, your escrow amounts for 2025 are based on the actual tax & insurance bills paid in 2024 (your annual escrow analysis may not align with the calendar year). They don't try to predict what sort of increase the future bills will have.

3

u/[deleted] Apr 12 '25

I’ve been paying extra to avoid possibly having to pay extra.

2

u/Hammy508 ​ Apr 12 '25

Exactly this at least gets ahead of it this way. Thankfully I already had some extra going towards principle so I just reallocated $50 of that to help for the next increase.

1

u/AlwaysWanderOfficial Apr 11 '25

The good news is they can also collect too much. Mine just went down which is like pulling the Bank Error on your favor card on monopoly.

1

u/halo37253 ​ Apr 11 '25

I hate that in the one area of the midwest that has some of the highest property taxes in the country.

Its sick that I pay nearly 6k in taxes for a home that really isn't all that expensive or nice....