3 Ways Fixed-Rate Loan Payments Can Rise

Q: I have a 30 year fixed rate mortgage, but at the beginning of this year, my monthly loan payment went up—how can my payment increase if I have a fixed-rate mortgage? Sarah, Washington, DC

A: That’s a great question, Sarah. Although you have a fixed-rate mortgage, Sarah, which means that your interest rate can’t change, your monthly mortgage payment is normally comprised of other items that can change. I’m going to give you 3 Ways Your Fixed-Rate Mortgage Payments May Go Up:
1. A change in the escrow balance your bank charges you can affect your monthly payment.
2. A change in the cost of your property insurance can affect your loan payment if insurance is bundled into your monthly mortgage payment.
3. A change in your property taxes can affect your loan payment if insurance is bundled into your monthly mortgage payment.

In all 3 of these cases, your interest rate hasn’t changed but your overall monthly mortgage payment did. Thanks for your question, Sarah—good luck. For more real estate tips and information, visit my blog at geraldlucas.com or performanceproperty.com. I’m Gerald Lucas and I’ll see you again soon.