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Old 05-04-2011, 09:15 AM
 
Location: Atlanta, GA
504 posts, read 1,357,318 times
Reputation: 182

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I've just gotten a letter from my mortgage company that shows my projected low point at $1,874.32 and the required low point (cushion) is at $390.12. I've paid about the same amount ($676.37) on this house basically for the last 10 years. My payment is now going up by $235 a month! ? The only difference is that the house is not my main residence now (was before) and is now a rental (as of last week-end). I had the homeowners insurance change the policy over. That couldn't change the amount I owe each month by that much could it? It doesn't make any sense to me for the bill to go up that much every month.
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Old 05-04-2011, 11:09 AM
 
Location: Laguna Niguel, CA
768 posts, read 4,071,351 times
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Were they undercollecting property taxes for a period of time? As in, have your property taxes gradually increased but you have paid the amount from 10 years ago the entire time?
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Old 05-04-2011, 11:24 AM
 
Location: Richardson, TX
11,427 posts, read 17,993,621 times
Reputation: 29185
Homeowners insurance on a rental property is significantly more expensive than on owner occupied properties. Your insurance company raised your premium a lot and billed your mortgage company the difference. Your mortgage company had only been collecting enough from you to pay the old smaller premium. Your payment goes up because you have to now pay enough each month to pay the new higher premium AND make up the money the mortgage company already advanced on your behalf.

How much your payment would go up depends on how many monthly installments with the "wrong" escrow payment you made between the last account audit and the payment of the new insurance premium.

You may also have lost a homestead exemption when you moved out and will therefore have much higher property taxes.
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Old 05-04-2011, 11:41 AM
 
Location: Atlanta, GA
504 posts, read 1,357,318 times
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Thanks for the replies. The homeowners is most likely the main culprit. I figured that the tax difference from before by deduction is about $50 each month more than it always has been. It's strange because the tax amount never fluctuated that much in the last 10 years. I did have a homestead exemption and didn't think about loosing that either. So that makes sense for the tax amount to go up after loosing that. Would it be worth it for me to shop around to see if there is a better rate though? It just seems paying an extra $3000 a year for homeowners is a bit much (at least as far as I know). Of course I'm not even sure what would be a somewhat standard rate for that. I know it would depend on a lot of factors.

Brick Ranch built in 1954
1,035 Square Feet
3 bed / 1 bath
Alarm System
DeKalb County Georgia

Again thanks for the input!
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Old 05-04-2011, 11:42 AM
 
Location: Atlanta, GA
504 posts, read 1,357,318 times
Reputation: 182
Quote:
Originally Posted by ShanetheMortgageMan View Post
Were they undercollecting property taxes for a period of time? As in, have your property taxes gradually increased but you have paid the amount from 10 years ago the entire time?
I don't think I was underpaying. I think even one year that it was over the estimated amount. I guess anything is possible though.
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Old 05-04-2011, 12:18 PM
 
Location: Richardson, TX
11,427 posts, read 17,993,621 times
Reputation: 29185
It's always worth calling around to different insurance agents if you feel it is too high.

As far as taxes go, here in Texas next year's estimated tax values and amounts just came out. I checked mine on the Dallas County CAD's (central appraisal district) website. You should be able to see approximately how much higher the taxes are with no exemption.
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Old 05-04-2011, 12:44 PM
 
Location: Atlanta, GA
504 posts, read 1,357,318 times
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Thanks Debsi. I'll look into if DeKalb Co. has something online that will let me review that info (they probably do as it's in the top 4 most populous counties in Georgia). I'm thinking about refinancing my car anyway since the rate isn't the best. Maybe I'll go to my bank and see what kind of deal they'll give me to move my car and my house over to their insurance. I already also have a credit card through the same bank as my savings. Might save me some $.
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Old 05-04-2011, 03:07 PM
 
Location: Boise, ID
8,043 posts, read 24,391,614 times
Reputation: 9353
Quote:
Originally Posted by sjuraud View Post
I've just gotten a letter from my mortgage company that shows my projected low point at $1,874.32 and the required low point (cushion) is at $390.12. I've paid about the same amount ($676.37) on this house basically for the last 10 years. My payment is now going up by $235 a month! ? The only difference is that the house is not my main residence now (was before) and is now a rental (as of last week-end). I had the homeowners insurance change the policy over. That couldn't change the amount I owe each month by that much could it? It doesn't make any sense to me for the bill to go up that much every month.
Is that backwards or did you slip a decimal place on the low point? If your projected low is $1874 and your required low point is only $390, then your payment should go DOWN, not up. Sounds like your payment is in the same range as mine, and if I lost my homeowner's exemption, my taxes would double. Given that you appear to be in my same price range, I would guess that your required low is $390.12 and your projected low is maybe $187.43 instead of $1874.32. Otherwise, something is wrong with those numbers.

Either way though, an increase of $235/month seems really high to me. Even if my taxes and insurance both doubled, that would only raise my payment by about $120/month. You are talking twice that. So something else doesn't seem right there still. How much are your taxes and insurance in the first place? Maybe they are a larger chunk of that payment than I am estimating.
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Old 05-04-2011, 03:13 PM
 
Location: Boise, ID
8,043 posts, read 24,391,614 times
Reputation: 9353
Quote:
Originally Posted by sjuraud View Post
Thanks Debsi. I'll look into if DeKalb Co. has something online that will let me review that info (they probably do as it's in the top 4 most populous counties in Georgia)..
They do appear to. I googled Dekalb assessor office and pretty quickly found a searchable database, complete with a TON of details (way more information than my county provides, I'm jealous), including exemptions.

http://gisweb.co.de-kalb.il.us/qtas/QTASSearch.asp
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Old 05-04-2011, 03:24 PM
 
Location: Atlanta, GA
504 posts, read 1,357,318 times
Reputation: 182
Thanks Lacerta, something does seem wrong with it. There isn't a mistake for the decimal as far as the paperwork I got though. Those are the actual two figures listed. I forgot to put a "-" in front of the "-$1,874.32". So that would skew the math the other way. I don't know how that would be slotted in the negative though.

Here's the rundown on what's listed on the Escrow Analysis.

Current Payment: (basically for the last 10 years)
Principal / Interest = $527.61
Monthly Escrow = $148.76
Total = $676.37

New Payment:
Principal / Interest = $527.61
Monthly Escrow = $383.76
Total = $911.37

The total escrow shortage is listed as $2,264.44 split into 12 payments of $188.70.

Does any of that make sense or do you need any more info? Not sure if this is a typical amount or if there is a mistake from the mortgage company / insurance side maybe?
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