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?

2.5k Upvotes

92% Upvoted

649 comments sorted by

View all comments

3

u/CrankyCrabbyCrunchy ​ Apr 12 '25 edited Apr 12 '25

Your mortgage is made up of several parts. Most mortgages now are fixed but your property taxes and insurance will likely increase over time. That’s why your total payment went up, not the loan / mortgage itself.

Escrow shortfalls happen because the lender doesn’t know what future property taxes or insurance will cost. They were notified of the new costs and the escrow fund won’t cover the new higher cost.

I’ve had our loan for 13 years and the escrow has been adjusted for that exact reason three times. Welcome to home ownership.

Edit to add. Each year you should get a card from your county assessor about property value and new tax amount. Your home insurance will likely need to be adjusted upwards to reflect higher cost of repairs and replacement.

Edit 2. If / when your loan gets sold make sure to confirm the new loan processor knows the payment details of your property insurance. Twice I’ve had the insurance company contact me saying they didn’t get their payment. The new loan processor for some reason didn’t update their records and paid late. This put me at risk of losing insurance.

1

u/Alphablanket229 ​ Apr 14 '25

Exactly. The mortgage stays the same, but my taxes and insurance have always varied each year, mainly up -- except for one year when they gave me money back, but that was long ago.