Everybody recalls the nervousness they felt when they decided to purchase a home. It seemed like an eternity signing pages worth of documents, taking breaks in between to rest your hand. In that moment as the attorney or title representative explained what you were signing, due to the mixture of nervous excitement, you probably don't remember any of what they said! Information overload at it's finest! This is a judgement free zone, leave your truths here. If your mortgage payment has gone up, and you have no idea where to look, I hope that this article will serve as a reminder for you. Your monthly payments is a combination of a few different things, so don't panic, before you think that your were scammed in some way, keep reading. If you make a payment to a bank, you more than likely have an escrow account. In your escrow account there is money being allocated from your monthly payment to your PITI. Principal, Interest, Taxes, and insurance. Any changes with any of these could raise your Monthly obligation.
1. Principal: Your principal is the actual amount owed on your house. The only thing that could increase your amount owed after closing would be loan modifications, deferring mortgage payments, or the end of a forbearance. So if you took the opportunity to take advantage of covid relief programs allowing you to skip mortgage payments, it's possible that that period is up, and now the bank not only wants their money back, they want it with interest. Some of those relief programs can hinder you from tapping into the appreciation of your home if you need to make any changes, or are in a bind. Most people weren't aware what they were signing for, if you did this, and would like to see what your options are, don't hesitate to ask, Larita Thomas Group can help get you to the right people.
2. Interest: Remember when the rates jumped up, and everybody on social media was posting "Marry the house, date the rate" well if the rates are anything like the dating pool, it probably switched up on you a few times. There are a few different types of mortgages, or rate buy down options. Some of those options were awarded the buyer with temporary lower payments. If you are unsure about the mortgage you signed for, you have the option to reach out to the lender you worked with, or a new one to look at refinance options. Fixed rate mortgages are the most streamlined way to make sure your payment doesn't fluctuate.
3: Taxes: Today taxes are one of the main culprits. Did you file for your exemptions with your local county? Homestead and mortgage exemptions are the most common exemptions available to home owners, it saves you thousands of dollars a year, and sometimes with the excitement of being a homeowner, and creating this inviting peace of mind after closing, people forget to about the pink or yellow peace of paper at the closing table, when the title rep slowed down and said "THIS PAPER IS YELLOW BECAUSE IT'S VERY IMPORTANT YOU DO THIS! For those who purchased new construction, or homes that were recently flipped, it's likely the home was being assessed at a lower value. I'm sorry your 250k home is supposed to have more than $500 taxes. Even if you didn't purchase a flip, are you noticing homes in your area selling for higher than what you paid? If so, it's likely that your property values have increased, causing the taxes to increase, which means the escrow amount to needed to be increased in order to the taxes to be covered. The Good news is YOU PROPERTY VALUE IS GOING UP! If you are looking to move and need a downpayment this is good, if you are looking to make some home improvements, and don't have the funds, this is good. If you are wanting to pull money out for other endeavors, it may be possible. Our team can send you a market report. No obligation. We'd love to help.
4: Insurance: Insurance premiums have been increasing significantly, which could create an escrow shortage which means you have to pay more monthly. The good thing is, there are a GAZILLION insurance agents, that can provide you with lower premiums. Be mindful not to reduce coverage too much, your home is an asset, you want to protect it. Our team can connect you with trusted insurance professionals, so you aren't being bombarded with spam likely phone calls.