Mortgage Went Up Due to Escrow: Unveiling the Cost Increase Secrets




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Mortgage Went Up Due to Escrow

Has your mortgage payment recently increased unexpectedly due to escrow? You’re not alone. Many homeowners experience this frustrating situation, and it can be challenging to understand why it happened and what you can do about it. In this article, we’ll shed light on why your mortgage may have gone up and provide some tips on how you can navigate through this process.

Understanding Escrow

Escrow is an account that your mortgage lender sets up to hold funds for property taxes and insurance. Each month, a portion of your mortgage payment goes into the escrow account to cover these expenses when they become due.

When you first obtained your mortgage, the lender estimated your property taxes and insurance premiums based on the information available at that time. However, over time, these costs can change due to factors like reassessments of your property value or changes in insurance rates.

Reasons for Escrow Increases

There are a few common reasons why your mortgage payment might increase due to escrow:

  1. Property Tax Increase: If your local government increases property taxes, your escrow payment will need to reflect the higher amount needed to cover these expenses.
  2. Homeowner’s Insurance Premium Increase: If your insurance provider raises your premium, your escrow payment will also go up to accommodate the higher cost.
  3. Insurance or Tax Shortage: If there wasn’t enough money in your escrow account to cover the actual expenses, your lender will adjust your monthly payment to make up for the shortage.

Steps to Take If Your Mortgage Escrow Increases

Discovering that your mortgage payment has increased can be unsettling, but there are steps you can take to address the situation:

  1. Review Your Escrow Analysis: Your lender is required to send you an annual escrow statement that breaks down how your escrow funds were used. Review this document to understand the specific reasons for the increase.
  2. Verify the Accuracy of the Information: Check if the property tax or insurance premium increase stated on your escrow statement is correct. If there are errors, reach out to your lender and provide them with the accurate details.
  3. Appeal Your Property Taxes: If you believe that the assessed value of your property is incorrect, you may consider appealing the property tax assessment. Consult with a local real estate professional who can guide you through the process.
  4. Shop Around for Insurance: If your homeowner’s insurance premium has increased, it may be worth exploring other insurance providers to see if you can find a more competitive rate without sacrificing coverage.
  5. Request a Reassessment: If your insurance premium increased due to factors such as changes in your credit score or claims history, request a reassessment from your insurance company. In some cases, this might result in a lower premium.
  6. Consider Paying Taxes and Insurance Directly: Some lenders allow homeowners to pay their property taxes and insurance premiums directly, rather than through escrow. This option allows you to have direct control over these expenses and avoid potential surprises or increases in your mortgage payment.

Frequently Asked Questions Of Mortgage Went Up Due To Escrow: Unveiling The Cost Increase Secrets

Why Did My Mortgage Payment Increase?

Your mortgage payment may have increased due to changes in your escrow account, such as higher property taxes or insurance premiums.

How Can I Prevent My Mortgage From Going Up?

You can prevent your mortgage from increasing by monitoring your escrow account, keeping an eye on property tax assessments, and shopping around for insurance premiums.

What Should I Do If My Mortgage Went Up Unexpectedly?

If your mortgage payment increased unexpectedly, review your escrow statement, understand the reasons for the increase, and contact your mortgage servicer for clarification.

Can I Dispute The Increase In My Mortgage Payment?

Yes, you can dispute the increase in your mortgage payment by providing documentation to support your case, such as proof of lower insurance premiums or property tax assessments.


While it can be alarming to see your mortgage payment increase due to changes in your escrow account, understanding the reasons behind it and taking appropriate action will help you navigate through this situation more effectively.

Review your escrow analysis, verify the accuracy of the information, and consider options such as appealing property taxes or reassessing your insurance premium. Remember to communicate with your lender and insurance provider, as they can provide guidance and assistance in resolving any discrepancies.

By taking proactive measures, you can regain control over your mortgage payment and ensure that your escrow account accurately reflects your property taxes and insurance expenses.

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