Did you recently find you’re paying more for your mortgage? You’re probably wondering, “Can my mortgage go up without notice?”
At Champions Mortgage, we have all the information you need about home mortgages. From providing cash-out refinance in Texas to helping you understand the reasons behind mortgage rate chances, we empower good financial decisions.
Factors That Can Increase Your Mortgage
The following factors can lead to mortgage payment increases, though in most situations, you should receive a notice that warns you of an upcoming rate increase.
Adjustable Rate Mortgages
If you see an increase in your mortgage payments, the most likely reason is you have an adjustable-rate mortgage. Many people prefer ARMs because they often have lower interest rates and initiation fees. However, if the federal interest rate increases, so does the mortgage.
Your rate should stay the same for the first few years, after which it may change every six months or so. In extreme cases, the payment can vary up to a couple hundred dollars a month. Your mortgage provider must send you advanced rate change notifications so you can prepare.
Property Taxes
Most mortgages lump your property taxes in with your monthly payments. The taxes go to an escrow account, which then dispurses them on your behalf when the payments come due. Property taxes usually increase every two to five years, depending on your location, and your mortgage payments will increase proportionally.
Home Insurance Premiums
If you’ve filed a claim with your homeowner’s insurance or the company raises its prices, you’ll likely see an increase in your mortgage payments. Like property taxes, most homeowners include these payments in their escrow account.
Escrow Issues
If the money in your escrow account comes up short, usually because costs increased rapidly with little notice, you’ll make up the difference over time with higher monthly payments. Thankfully, sometimes experts overestimate your costs, which means you have a surplus in escrow, and your mortgage payments can decrease.
Tips for Dealing with Mortgage Increases
Knowing the answer to, “Can my mortgage go up without notice?” may feel overwhelming, but you can use the following suggestions to help deal with the increase.
Verify Increase
First, confirm the mortgage increase isn’t a mistake, especially if you never received notice of it. Contact your lender to confirm the reason for the increase, especially if you have a fixed-rate mortgage. Remember to always open mail from your lender, the local tax authorities, and your insurance company so you never miss a notification of an upcoming rate increase.
Adjust Your Budget
If you experience only a marginal increase in your mortgage payments, you may find ways to adjust your budget accordingly. For example, if you buy a $3 coffee on your way to work every morning, you’re spending around $60 a month just on coffee. If you make coffee at home, you could save significant money that you could divert to your mortgage payments.
If you have some room in your budget, consider talking with a financial advisor to better afford your higher mortgage payments.
Increase Income
If you’re able, consider finding ways to increase your income. You could ask for a raise at work, invest, or start a side gig.
Consider Refinancing
If you refinance your home, you could obtain better rates and lower your payments to their previous levels. Consider a fixed-rate mortgage to avoid future rate increases.
Contact Champions Mortgage for Help
Now that you know the answer to “Can my mortgage go up without notice?” you can take steps to deal with the issue. If you’re considering refinancing a house after purchase, reach out to Champions Mortgage. We’ll work diligently to get you the best rates.
To book an appointment, call Champions Mortgage at (281) 727-2500.
