Frequent Questions our Homeowners Ask

WHY DID MY MORTGAGE LOAN PAYMENT GO UP?

An unexpected change to our monthly mortgage payment can come as a bit of a shock to our budget so it is good to be prepared.

When you close on your home mortgage loan, you will have a regular payment amount that will show on your closing docs. You will make this same payment every month until there comes a month when your mortgage payment changes. Now, why does it do that?

Your Mortgage Payment Will Change – It Will Not Stay the Same. The mortgage for your home is one part of your payment, but there are other expenses as well, such as the maintenance of an escrow account for the payment of insurance and property taxes.

Homeowners insurance cost does not change much from year to year unless you change your level of coverage. One of the biggest fluctuating expenses for homeowners comes in the form of property taxes. It is important to be aware that this is not a constant set amount.

Here are the biggest reasons mortgage payments change.

  • PROPERTY TAXES AND/OR HOMEOWNERS INSURANCE PREMIUMS INCREASE
    Property tax rates will change when home values increase. This impacts the amount you pay in taxes. If your monthly mortgage payment includes an amount you must pay into your escrow account, then your payment will go up if your property taxes or homeowners insurance premiums go up. You are notified of this change by mail and email through an annual Escrow Analysis.
  • ADJUSTABLE RATE MORTGAGE (ARM) AND THE INTEREST RATE CHANGES 
    Check the type of mortgage you have. Some homeowners believe that they have a fixed-rate mortgage loan, when their loan actually includes an adjustable-rate or some other feature that can cause their interest rate and payment to change.
  • INTEREST-ONLY/ PAY-OPTION LOAN AND YOU BEGIN TO PAY PRINCIPAL
    With these loans, you can postpone making principal payments for a while. That means that for a period of time you are only paying off the interest that’s accumulating on the amount you borrowed to pay for your home. Eventually, you have to start paying principal, or the actual amount you owe on the home, and that will make the monthly payments go up.
  • YOU HAVE A DECREASE IN YOUR INTEREST RATE OR YOUR ESCROW PAYMENTS
    Have you stopped paying for private mortgage insurance? If you have private mortgage insurance, your payments may change once you are able to and do cancel the insurance.

 

August Real Estate Investments, LLC

3960 Broadway Blvd. Ste.107 Garland, TX 75043
P.O Box 496644 Garland, TX 75049
Main Number (972) 767-9219
Toll Free: (844) 286-1145
Toll Free Fax: (888) 475-4103
Please contact us today to discuss your loan.
Open: 8 am to 5 pm Everyday of the week

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