HOMEOWNERS across America have found themselves surprised by their mortgage payments and taken to social media to share.
One TikToker recently shared how her mortgage went up by $1,200 per year.
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The vlogger, @Mzfancyy, said she was inspired to post after seeing others complain about rent hikes.
“So I had to get on here this morning and share,” she said.
Many people turn to homeownership as a way to build wealth and insulate themselves from the costs of renting, which can rise rapidly with inflation and gentrification.
Mzfancyy warned that owning a home didn’t eliminate high costs.
“If you’re trying to become a homeowner, it’s a beautiful thing, but our mortgage goes up just as well,” she said.
WHAT TO KNOW
Mzfancyy said her payments went up by $100 a month because of escrow.
“To a lot of people that may not be a lot, but to me that is crazy,” she said.
Escrow accounts are set up to help homeowners pay for taxes and insurance.
They’re paid together with your monthly mortgage payment.
If taxes or insurance costs go up, your mortgage does too.
“A lot of times when you purchase homes, these realtors, they don’t share that information,” Mzfancyy said.
Mortgages are often “fixed,” meaning that some aspects of payments do not change.
However, this can make it appear that the full payment will remain stable over time, which is not necessarily the case.
This can cause frustration for homeowners like Mzfancyy, who complained that other costs were being driven up by inflation on top of her increasing property taxes.
“How can we put an end to this?” she asked. “Where do we start?”
Property taxes are often determined at the local level and tend to fluctuate with each evaluation of your property, which typically happens once a year.
Escrow and mortgage increases explained
What’s an escrow? Why did my mortgage payment go up?
Escrow accounts are set up to help homeowners cover insurance, property taxes, or other home-related expenses.
If you have an escrow, part of your monthly mortgage payment goes towards the account.
The escrow management company then uses the money in the escrow account to pay for taxes and insurance when those payments come due.
Essentially, the escrow bundles these other charges with your monthly principal payments, making them easier to manage. This is meant to make homeowners less likely to default on their payments.
If the government’s annual valuation of your home determines that your property taxes will go up, the escrow payments can spike as well, meaning that even those with fixed mortgage payments can find themselves forking over more cash every month.
MORE MORTGAGES
Several others have turned to TikTok to educate fellow homeowners about the possibility of escrow changes.
One woman said she was “about to start cussing” after becoming frustrated by her high escrow.
A Florida real estate broker used his TikTok platform to explain escrow.
He said that while it may spike after a year in your new home, it often goes back down.
Another influencer recently said she felt “bamboozled” by her high mortgage payments.
Other homeowners have said they feel stuck with “golden handcuffs” after securing low interest rates.