You might have a “fixed-rate” mortgage, but that doesn’t mean your monthly payments won’t rise.
A fixed-rate mortgage doesn’t guarantee that your monthly payment will never change. If you chose to go with an adjustable-rate mortgage, it should come to no surprise when your mortgage fluctuates. After all, that is what adjustable means. But fixed-rate should mean that your mortgage should stay the same, right? Well, that’s not always the case. There are some signs your mortgage is about to increase, and it’s important to recognize these signs to stay proactive.
- Property Tax
What goes up, must come down. This isn’t true for everything, however: our age, the amount of dark energy in our universe, and property taxes. The downside to a strong real estate market is that taxes will inevitably increase. If your property taxes increase, you might want to challenge your property’s assessment. Don’t get your hopes up, though, only 20 to 40 percent of people who challenge their tax increase are successful in lowering their tax bill.
- Low Escrow Account Balance
Some people open an escrow account to pay their property taxes and homeowners insurance as part of their mortgage payment, instead of having to deal with each on their own. If your escrow account doesn’t have enough money to cover taxes and insurance, your monthly payment will increase.
- Homeowners Insurance Renewal
Insurance is one of those things no one wants to pay for, but when you have it, you’re grateful. When it comes to the renewal your policy, you may see an increase in your monthly payments. Your agent should effectively communicate with you when there’s about to be an increase—if they don’t, you need to get a new agent.
Increases don’t mean the end of the world. For more information or help on how to pay off your mortgage, contact me, Andraya Coulter. I serve the Bay Area and the entire state of California and Texas with quality, suitable home loans!