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Brooks Kelly

Mortgage Loan Originator

NMLS #208792
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May 8 2017
Loan Originator Profile Photo
Brooks
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What is an Escrow Account Analysis? And Why Did My Payment Go up?

We get many calls this time of year asking questions about property taxes, homestead exemptions, insurance payments and the most frequent one….WHY did my payment just go up?

The answer is most likely found in your escrow account analysis that your loan servicer will send along with your mortgage statement that has a higher payment on it. The main reasons you will see an increase in your payment is due to either 1) your property taxes increasing or 2) your insurance costs increasing. If you bought a new build, this can come as quite a shocker since your property taxes were most likely based on the actual amount, most of the time that is just the lot value at the time of closing. If you bought an existing home, most likely you are seeing a higher appraised value on your home than the previous year.

So for example, say your property taxes were $4800 per year when you closed on your home, but in 2015 they went up to $6000 per year (yes we have seen increases like that). Your servicer went ahead and paid the bill for the $6000, but now they need their money back. They will give you two options. 1) to pay them $1200 right now and your mortgage payment goes up $100 per month or 2) do not pay them anything right now and your payment will go up $200 for the next 12 months, then go down $100 once they are paid back their $1200 they paid for you.

Please make sure you have filed your homestead exemptions that pertain to you with the county and if you want to dispute your value for 2017, be on the lookout for the valuation to come in the mail from the county in May. All disputes must be completed by May 31st to count for this upcoming year. Most counties allow you to do this online but some require you to mail it in and then come in person for the decision. There are also services out there that will do this for you, just type in “property tax dispute Texas” into your search engine and many choices will come up.