Mortgage Payment Increased $220/month!!
Hey BP. I just wanted to share a little story for maybe some newbies to be aware of:
I bought my current residence from a guy who had been living there for 20+ years. He had filed homestead, and thus his property value was only able to increase by 3% each year. When he was paying taxes, the property was valued at $165,000 but he was only getting taxed at a value of $95,000. He was paying around $1100/year in taxes with homestead exemption.
When purchasing the property I factored in that $1100/year. I knew I'd be filing for homestead exemption so this seemed right to me. I did what I thought was my due diligence and checked the property appraisal website to see what taxes would be for me. For the first year, my lender only factored in that $1100/year as well. Then last year they got hit with having to pay the $2200 when they had only budgeted the $1100. Now, in order to make up for that EXTRA $1100 that my escrow was BEHIND my monthly payment went up about $100/month just to make up that debt and ADDITIONALLY my monthly payment increased $100/month because that's what I actually have to pay for taxes.
(My home insurance somehow went up as well but that's another story...currently getting quotes for a different home insurance).
At first, I was flabbergasted and thought a huge mistake had been made. In reality, it is right and although I'm not happy about the increased payment, I'm just glad to be to the bottom of it. I just wanted to share to others because I usually factor in taxes on what was paid last year, but now I'm going to do it THE RIGHT WAY and factor in taxes on what the property is appraised for.
Lesson Learned.