Why did my mortgage payment go up $200?

What $200 a month actually is

Two hundred dollars a month is $2,400 a year. That is a textbook property-tax change: an assessment increase, a rate increase, or the first full year after a purchase. Insurance can do it too, but at this size you should read the tax disbursement before you call the insurer.

Over a year, $200 is $2,400. That annual figure is the one to match against a tax bill or an insurance premium, because those bills arrive once or twice a year and escrow turns them into a monthly deposit. Principal and interest on a fixed-rate loan does not produce a sudden $200 step-up. If the rate on the statement is unchanged, stop looking at the rate.

A worked example

Last year the servicer paid $3,800 in taxes and $1,900 in insurance. This year the assessment notice shows $6,200 in taxes and the policy renews at $1,900. New escrow is ($6,200 + $1,900) / 12 = $675. Old escrow was ($3,800 + $1,900) / 12 = $475. The payment is up $200, and insurance contributed nothing.

Where to look on the statement

The escrow statement should list the tax payee and the disbursement date. Compare that dollar figure with the bill from the county or city, not with a neighbor's bill and not with last year's coupon. If the servicer's tax line is higher than the bill, that is a reason to ask for a re-analysis. If the servicer's line matches the bill, the servicer is doing what escrow is for, and any fight is about the assessment.

The annual escrow account statement has two jobs: a history of what was paid, and a projection of what will be paid. The payment change lives in the projection. Bring the insurance declarations page and the tax bill to the same table. A line that does not match those documents is the line to ask about, even when the monthly total is a round number like $200.

The mistake this amount invites

Calling the servicer to 'fix the taxes' does not lower an assessment. The servicer pays the bill it is given. Appeals, informal reviews, and board hearings are filed with the assessor, and they have deadlines that are easy to miss while you are waiting on a call center. A $2,400 tax increase is large enough to check against recent sales of similar houses.

What to do this week

You can do this with the payment explainer or on paper. The goal is a split of the $200 that names a document for each dollar, then one action for each document.

• Put the new tax amount next to the escrow projection. They should match.
• Find the appeal deadline on the assessment notice. Write it down before you gather sales.
• If the value looks high, use the appeal checker with at least two recent sales, then file on the local form.

Questions people ask about this

Sources

• 12 CFR § 1024.17, Escrow accounts (Regulation X)
• CFPB: What should I do if I have problems with my escrow account?