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I bought my first home last summer, and since then my mortgage has changed hands several times. Most recently, the bank that owned it was acquired by another institution about four months ago.

Since then, my monthly payment has gone up by nearly 50% due to a sudden increase in the escrow amount. I was already withholding to pay my property taxes, and even if that amount was previously zero the amount of the increase alone is more than the tax rate per month.

Because I'm still new to the ins and outs of home ownership finance, I'm wondering what information to request or what recourse I might have to try and fix this seemingly erroneous recalculation. Fortunately I can afford it until they recalculate again in July, but it's still a significant amount of money for me.

Chris W. Rea
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hunsbct
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1 Answers1

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Just to make this an Answer rather than a comment:

  1. Ask the bank. No need to guess.

  2. If something the escrow is paying for, like real estate taxes or insurance, has gone up the escrow portion of your payment will be adjusted to cover that cost. The adjustment may not be synchronized to the change; the bank may let the escrow account run a bit behind and then adjust the payment so it will catch up again.

(I was allowed to decline escrow and pay the insurance and tax bills myself as they came in, perhaps because I was borrowing only half the cost of the house. If you're scrupulous about paying bills on time, I think that's worth considering; it makes the cash flow easier to understand and gives you some warning about how much cost will remain when you have paid off the mortgage ... and encourages you to think about whether you have the best insurance for your current needs.)

keshlam
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