Why did my payments on my mortgage go up?

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Why did my payments on my mortgage go up?

I got a letter saying that we are short on our escrow. What does that mean?

Asked on June 14, 2012 under Real Estate Law, Michigan

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

When you buy a home the bank will generally pay the insurance and taxes on the home directly with out your having to do so.  When you pay your mortgage every month a portion of that payment is for the insurance and the taxes.  When you pay it the bank holds that money  for safe keeping and their custody in an acount for your benefit ("escrow").  If the taxes or insurance go up then the bank is entitled to re adjust your payments to get more money to pay those obligations.  Call and speak with the lender and ask why.  You have the right to do so.  Good luck.


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