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12-16-2008, 03:08 PM
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My mortgage interest has been reduced from 5.87% to
4.88%, and it is a 30yr adjustable FHA loan, but my? monthly payment has been increased from $1207.49 to $1496.42 I have talked to Wells Fargo and they have said because the property tax increase and home insurance I am short on Escrow balance that's why the payment went high even the interest rate got lower. Also, I have a cosigner on my loan does the property tax effected because they could see there are more annual income or this is normal? Is there any way to reduce the payment beside refinancing loan? Thanks
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12-16-2008, 03:10 PM
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i have never heard of a 30yr adjustable mortg are you sure its not a 3yr arm there is no such thing as a 30 yr adjustable loan you have been misinformed and now your payment increased get out your paperwork and read what you really sighned instead of what they are telling you.
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12-16-2008, 04:36 PM
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It sounds like your payment went up because of taxes, not because of the change in the loan. In fact, if you didn't get your rate reduced, the amount you owe would have gone up even more. If you were short on escrow for taxes & insurance, you are making up for funds which have been disbursed (or are being disbursed soon).Cosigners on loans have no impact on property tax. In some areas you can appeal to the tax assessors office if you think they have over-valued your home. This could result in a reduced property tax burden in the future.Refinancing the loan is usually the only way to reduce your payments. Be sure to review your loan documents so you fully understand the new loan agreement you have entered.Hope this helps. Good luck!
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12-16-2008, 05:57 PM
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If you are able, you should refinance to a fixed rate loan. While the interest rate on your loan has gone down, for now, because of the recession, it will go back up in the future. The tax increase has nothing to do with the income of the homeowner. Property taxes are based on the value of the home, not the income of the owner. Insurance rates are set by the insurance company and also are based on the property's value not the owner's income. While you are shopping for a new fixed rate mortgage, you should also shop around for insurance on your home. There may be another insurance company with better rates.
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