How to Deal with a Mortgage Increase
Your Mortgage increased. Now what?
First let’s understand the mortgage itself. Your mortgage is comprised of four things:
The principle payment on what you financed from the bank
The interest on that loan
Your property taxes
Your home owners insurance
While your interest rate may be fixed, your taxes and home owners insurance can increase. Thereby increasing your monthly mortgage rate.
WHAT MAKES THE INTEREST RATE and INSURANCE INCREASE?
Property taxes generally increase when recent home sales in your area increase. This raises the value of your neighborhood. Government changes to tax policies and home improvements you make to your home are other ways they may increase.
Insurance generally increases when inflation happens. Inflation can be the cost of materials going up and/or the insurance company having to cover huge natural disasters. Another reason for increase is that you filed a claim. I know, I know. Don’t get me started on how many times I think to slow down on real estate to become an attorney strictly to fight insurance companies 😩!
So how do you fix it?
Well, if it’s a tax increase and you feel nothing has happened to warrant the increase, you can file an appeal. Check your local taxation office for documentation on how to go through the process. Ive placed a link for Marylands appeal process here. The appeal forms for your county can be found here.
If it’s an insurance increase there is two options. A clients recent experience with this reconfirmed to me that a good phone call or letter may help a bit. Her phone call resulted in a slight decrease. Even if they do decrease it - move on to option two. SHOP AROUND! You’re not obligated to stay with the same company. Get to researching and dont forget to mention all saftey protections you have in your home. Home insurance companies tend to give discounts for safety features such as water monitors, lockable storm doors, fenced in yards, and alarm systems.
Eager to explore real estate opportunities in Baltimore? Look no further than me, Erika Walker, your trusted guide to navigating Baltimore's dynamic market.
Erika Walker
Maryland Realtor®
443.468.0757 (c)
443.233.6156 (o)
Realty One Group Excellence
1864 Reisterstown Road Suite A-B
Pikesville, Md 21208