When your homeowners insurance or property taxes rise, your escrow payment rises even if your loan did not change. You have options before it turns into missed payments.
When your homeowners insurance or property taxes rise, your escrow payment rises, even if your loan did not change. You have options before it turns into missed payments.
Why your payment went up
Your monthly payment includes principal and interest, plus an escrow amount for taxes and insurance. When either one goes up, or when your servicer finds a shortage, the escrow part increases.
Ways to bring it down
Shop your insurance. Get quotes from several insurers and independent agents. Ask about discounts.
Get a wind mitigation inspection. Features like roof shape and opening protection can lower premiums.
Review your tax bill. Check your exemptions, such as homestead, and your assessed value. You may be able to appeal if the value is wrong.
Ask your servicer about an escrow shortage. You may be able to spread it over twelve months instead of paying it all at once.
Look at refinancing or recasting if it still makes sense.
If it is already too much
Call your servicer before you miss a payment and ask about hardship options.
Talk to a free HUD-approved housing counselor.
If you cannot make it work, compare selling now versus waiting.
When selling may be the better move
If the new payment is permanently out of reach and you have equity, selling now protects it. If you owe more than the house is worth, a short sale can still beat a foreclosure.
What to do this week
Pull your escrow analysis, insurance bill, and tax bill. Send me the numbers and your payoff, and I will tell you whether holding or selling makes more sense.
Originally published on Equity Edge Orlando. Reviewed for this Substack edition.