Why Did My House Payment Go Up $80 Per Month?!
As a first-time home buyer, you're so excited. By the time you get through the loan process, you feel like you've completed a triathlon. Then there's insurance and taxes to think about, as they can have a big impact on your monthly budget. When you get a loan to purchase a home, your bank or lender may use an “escrow” account for your mortgage. A mortgage escrow account has 3 categories: principal, interest, and escrow. When your insurance is paid using an escrow account, the lender will request that they be added to your home policy, using a “mortgagee clause.” The mortgagee clause includes the lender’s name and billing address for insurance. This ensures that the lender will receive all policy change notifications, renewal notifications, and cancellation notices related to your property insurance. They do this to help protect their financial interest in your property until the loan has been paid in full. When the lender gets an insurance invoice, they wi...