Why Did My Mortgage Amount Change? Here's What You Need to Know
Getting a mortgage is a huge milestone—but it can also come with a few surprises. One of the most common questions homeowners ask is: “Why did my mortgage amount change?” Whether you're still in the loan process or have already closed, changes to your mortgage payment can happen—and it's important to understand why.
At A and N, we believe in keeping you informed every step of the way. Let’s break down the most common reasons your mortgage amount might change.
1. Escrow Account Adjustments
Your mortgage payment often includes escrow—a monthly amount set aside to pay property taxes and homeowners insurance. If your taxes or insurance premiums go up (or down), your mortgage servicer may adjust your monthly payment to cover the new amount.
Example: Your property taxes increase due to a higher home assessment. Your monthly payment goes up to keep your escrow account balanced.
2. Changes in Interest Rate (If You Have an ARM)
If you have an adjustable-rate mortgage (ARM), your interest rate can change after the initial fixed period. When that happens, your monthly payment may increase or decrease based on current market rates.
Tip: Make sure you understand the adjustment period and caps on your ARM loan so you’re not caught off guard.
3. Private Mortgage Insurance (PMI) Removal
If you put down less than 20% when buying your home, you likely pay private mortgage insurance (PMI). Once you build enough equity, you may be able to remove PMI—which can reduce your monthly payment.
Good news: Your lender is required to automatically cancel PMI once your loan reaches 78% of the home’s original value, assuming you're current on payments.
4. Loan Modification or Refinancing
If you refinance your mortgage or go through a loan modification, your loan terms can change—including your interest rate, loan length, or even the loan balance—which all impact your monthly payment.
Refinancing can help you lower your payment, pay off your home faster, or switch to a fixed rate for more stability.
5. Missed or Partial Payments
If you miss a mortgage payment or make only a partial payment, your next bill might include late fees or unpaid balances, temporarily increasing the amount due.
Avoid surprises: Always review your statements and reach out to your servicer if something looks off.
6. Property Reassessment or Tax Changes
Your local tax authority may reassess your home’s value—especially if property values in your area are rising. A higher assessed value can lead to higher property taxes, which affects your escrow and, in turn, your mortgage payment.
Pro tip: You can often appeal your property tax assessment if you believe it’s too high.
Final Thoughts
A change in your mortgage amount doesn’t always mean something is wrong—but it does mean it’s time to take a closer look. If you're unsure why your payment changed or want to explore options like refinancing or removing PMI, we’re here to help.
Welcome to a better mortgage experience! In just few minutes you can find out what you qualify for and explore multiple loan options and interest rates.
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