Your mortgage payment may be going up


Last week we received a postcard from our friendly tax assessor informing us that our assessed value increased 14% over last year.   When I owned my first home, this news would probably excite me.   What it really means is that our mortgage payment is going to increase.

Your note rate determines the principle and interest portion of your mortgage.  However, property taxes and home owners insurance can and do change…count on it.   Your mortgage company received the same notice about your property taxes, too (this is one reason why you pay the "Tax Service Fee" when you obtain a mortgage).   

Our new assessment is effective for our 2008 real estate taxes.   Once this rolls into place in the beginning of the new year, our mortgage company will contact us and may offer the following options, after reviewing our escrow account:

  1. Increasing our mortgage payment to cover the difference in the account.
  2. Allow us to pay the difference in a lump sum.

We will most likely opt to have our payment increased.   

Please do be aware when you’re buying a home, that even if you have a fixed rate mortgage, the taxes and insurance are not "fixed".   If you currently own a home in the Pacific Northwest where our values are still strong, be prepared to have your mortgage payment increase in 2008.   

And for those of you who are squeaking by making your mortgage payment, this is even more reason to put away your credit cards and to have your credit reviewed by a Mortgage Professional in the event you need to restructure your current financial position (do this at least 6 months before you need to refinance so you have a chance to make any corrections or improvements to your credit).   Don’t wait.

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