When you have a fixed rate mortgage, you expect your mortgage payments to remain the same for the life of the loan.

But what happens when your mortgage payment suddenly goes up?

This can be a frustrating and confusing experience, especially if you’re not sure what caused the increase.

1. Property taxes and homeowners insurance

One possibility is that your property taxes or homeowners insurance have increased, and these expenses are included in your mortgage payment. These expenses can change from year to year, and your lender may adjust your mortgage payment to reflect these changes.

      2. Escrow

      Another possibility is that you have a mortgage with escrow, in which your lender holds funds for property taxes and insurance, and then pays them on your behalf when they come due.

      If the taxes or insurance increase, it may lead to higher payments.

      Every year, your mortgage servicer does an escrow analysis to determine if you are over-paying or under-paying into escrow. 

      If you’re over-paying, they issue an overage check. 

      If you’re under-paying, they’ll notify you of the escrow shortage. You’ll have the opportunity to either make up the escrow shortage with a lump sum payment, or through installments. 

          3. Error in calculation of escrow 

          It could also be due to a mistake in the calculation or a failure to escrow correctly. Your lender may not have properly accounted for the changes in your property taxes or insurance, leading to an increase in your mortgage payment.

          If your mortgage payment has gone up and you’re not sure why, the first step is to contact your lender. They should be able to provide you with more information and help you understand the reasons behind the change. They might also be able to provide you with some solutions or alternatives. It’s also important to review your mortgage statement and tax bill to ensure that the numbers match and to make sure that you are paying the right amount.

          It’s important to remember that even with a fixed rate mortgage, your mortgage payment can change if your property taxes or insurance rates increase. If you’re concerned about the increase in your mortgage payment, it’s best to speak with your lender and take a closer look at your property taxes and insurance rates. By staying informed and aware, you can better plan for and manage any changes in your mortgage payment.

          Written with the help of ChatGPT.

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