‘Feels like I’m getting a third job’ after my mortgage went up $4,800 – the key to change was in my contract

MORTGAGES can be confusing and expensive for many homeowners.

A homeowner recently shared that her mortgage payment unexpectedly increased, leaving her broke.

Ashlee, Facebook user posted their fight for housing online.

“Ugh, my mortgage payment went up $400 a month!!!!” she said.

This equates to $4,800 per year.

“It feels like I’m getting a third job,” she added.

There are a few possible reasons why she and many others have found their mortgage payments have increased.

MORTGAGE MESSAGE

Some people have “fixed” mortgages, which means that some parts of the mortgage payment are not expected to increase.

Others have variable mortgages that change over time.

It’s unclear what kind of contract Ashlee had.

However, even those with fixed mortgages can find themselves stuck with high mortgage payments.

One of Ashlee’s friends commented that this happened to her.

“Ours went up almost $400 last year,” the friend said. “We thought ours was fixed. Legit doesn’t matter. What a joke.”

Ashlee said she thinks her payments went up because of taxes.

Taxes and insurance payments are the two factors that can increase a fixed mortgage payment.

This is thanks to a system called “escrow”.

If Ashlee has an escrow account, that means property taxes and homeowners insurance are part of her monthly mortgage payments.

Because these two costs can change with property values, this could lead to an increase in mortgage rates.

Lien and Mortgage Increases Explained

What is a deposit? Why did my mortgage payment go up?

Escrow accounts are created to help homeowners cover insurance, property taxes, or other home-related expenses.

If you have a deposit, part of your monthly mortgage payment goes into the account.

The escrow management company then uses the money in the escrow account to pay taxes and insurance when those payments are due.

Essentially, escrow bundles these other charges with your monthly principal payments, making them easier to manage. The goal is to make homeowners less likely to default on payments.

If the government’s annual assessment of your home determines that property taxes will increase, escrow payments may also increase, meaning even those with fixed mortgage payments could end up shelling out more money every month.

MORE MORTGAGES

A real estate agent recently shared on TikTok why escrow spikes occur.

He said some price increases may be temporary, fading somewhat over time.

One woman whose mortgage increased by $100 a month said the cost was “ridiculous.”

She warned other homebuyers that some estate agents will not tell you how much the deposit costs can increase.

Some have learned that buying a new home can cause big deposit surprises.

Others feel like they are “prisoners” of low mortgage rates now that interest rates are high.