How do mortgage payments go up if it’s a loan?
In: Economics
Even people with a fixed rate loan are subject to mortgage payment increases, due to increases in property taxes and insurance. Most homeowners don’t pay those in lump sums, their bank takes escrow payments and stores them in a separate account to pay them when they are due. There’s usually the estimated property taxes, insurance premium, and then a contingency fund in case they get the insurance or tax estimates wrong. All of that is tied in with your loan repayments to make up the overall mortgage payment. If any of that goes up, so does your mortgage.
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