Is my fixed mortgage going to go up?

Your Questions Answered

At Ashlar, I firmly b that an educated home buyer or seller is best equipped to make their own decisions. That’s why I take time out of my day each and every day to answer someone’s real estate question.  And, when I think the answer can be useful to you as well, I share it here.  So without further ado:


Is my fixed mortgage going to go up?

Nomenclature is improtant to understand your entire monthly payment.

Your monthly payment is made up of four key components:

1) The principal left on the loan (what’s left of original loan amount)

2) The interest calculated on that remaining principal

3) Property Taxes -Which is estimated by your loan servicer and then spread out over a year

4) Insurances (home owners and flood if needed) which like property taxes are estimated and spread out over a year.

in a fixed mortgage, the total of #1 and #2. You will pay way more interest than principal in the early years of the mortgage but the sum total will always be the same fixed number.

#3 and #4 there change year to year depending on what happens in those segments.

#3 Property Taxes usually hasa massive adjustment when the first calendar year turns over due to how county property reassessment works. After that if homesteaded it will be limited to 3% increases per year.

#4 Can and is currently varying widely. May people have had their insurances double from one year to the next as companies try to manage risk and protect profits.

Your loan servicer does their best to properly estimate these but sometime they get it wrong. Some homeowners have gottent letters requiring thousands of dollars to cover the gap from expected to actual insurances and taxes, and then the monthly payment also adjusts up to this new level to cover future years.

You can get ahead of things by contacting your insurer and seeing what rates are going to do (and potentially shopping around for a new one) and tax estimations can be done on the property appraiser’s website. But like I said, with property taxes year 1-2 is usually the big jump, after that it’s capped if you are homesteaded.

Kyle Sasser

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