HOME BUYERS are FREAKING OUT because of THIS...

Home buyers are freaking out due to an increase in their mortgage payments.

Many home buyers are not prepared financially for an increase in their mortgage payment. But why would someone's fixed mortgage increase? Well, it is because of mortgage escrows. This is what the mortgage company charges you for insurance and real estate taxes. If your insurance and real estate taxes increase, your lender has to adjust the amount you pay in your monthly escrows.

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Disclosure: Steve Daria is a real estate broker and investor. He is NOT an attorney, accountant or financial planner or any other type of licensed professional. Always seek out the appropriate professionals in your area for the advice needed regarding taxes, law, construction and finance. Florida Real Estate Broker Lic# BK3030453.

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[Jayla-djgj]

Where I live the property tax is 3.1% of purchase price and the realtors try to hide that.

[kleetus]

my wife has been warning people of this for about 2 years now. When everyone's escrow resets, there will be loads and loads of new foreclosures that no one saw coming. My own case, we bought a house for 400 in FL, the entire mortgage payment was 1550/month. Then, we get a letter from the escrow company a year later saying we owe them $10k AND if we pay that then our mortgage payment will only go up to 2000 / month. If we don't pay the 10k, then our payment would go up way higher than 2000 / month! And to top that, we homesteaded this house. Our insurance rates doubled and the value of our house when computing taxes also doubled or tripled. As a result, we had a huge problem. Luckily, we could pay it, but many others won't be able to.

[bradleyo]

Great video and explanation. I can imagine the gut punch people must feel who paid tens of thousands over list price just to see their taxes reassessed later on a inflated mortgage. Ouch!

[MikeSunRiseWest]

Ditch escrow. Put the $ in an interest bearing account and pay these things yourself. Why let somebody else earn interest on *your* money?

[Jack-Surreal_Panes]

Your home value increased, so will insurance. Property taxes raise, so will your payment. You may catch a break in 10 plus years for PMI, provided your property value is OK still.

[ct]

The fact the lenders will still finance a primary homeowner on 30 yr arm is criminal in my book.

[kszgamos]

Thx for the great explanation. Just got hit with this double whammy this year in Bonita Springs, property tax and insurance both doubled. Beautiful place to live but becoming less affordable by the day.

[emtharlan]

Every year your mortgage holder should send you an escrow analysis that explains any anticipated increases that will need to be paid for the following calendar year. You often have the choice of letting the increase be added to your monthly payment or sending a check for the amount of the increase. If you choose to send a check for the escrow shortage you can keep your monthly payment the same. Plan for it to happen every year.

[rdbeaz]

Your right and wrong property taxes can't go up more than 3%, but voting for school and police bonds will cancel out the 3%

[bigrod]

Yep. You bought on the high, you will be taxed on the high. HOA's are a slippery slope. They can and will go up. I already pay taxes to live on my property now I have to pay a seperate fee for the same reason? Pass. Yet people continue to be in a rush to disaster. Makes no sense.

[Chew]

In CA property tax increases are capped at 2% per year

[ericrivera]

What is a $2, 400 property tax bill! I would kill to have that and I would have so much more money aside for a bigger house or other savings and investments! I have nearly and $11, 000 tax bill for a 1, 300 sq ft cape in New Jersey!

[jgmiller]

Taxes in Texas can raise up to 10% per year and getting crazy
500k house would be around 10k in property taxes in DFW

Escrow normally goes up yearly, causing lots of older people to get taxes out of their homes and new buyers to fall behind

[SirCarlosMusicBMI]

Awesome information today. Thank you 🙏, Carlos

[ChrisGenXer]

Hey Steve! Love your videos, I appreciate your insight. Incredibly helpful.

[mcurtis]

I went from $1, 500 to $2, 300 in California. Luckily we sold the house so it’s not an issue now. That was a tax and insurance increase.