Mortgage Payment Increases on the Horizon: How to Prepare

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09.07.2024 Written by Fox Communities Credit Union

Are you Prepared for Mortgage Payment Increases?

The last few years have been one wild ride for homeowners. Property taxes and insurance premiums have dramatically increased over the last few years, often unexpectedly for homeowners. Now, experts are predicting higher monthly mortgage payments on the horizon. Are you prepared for new costs?

If not, you are not alone. Lereta, a professional property tax provider, surveyed 1,000 homeowners and found that of those who had already experienced an increase in their monthly mortgage payment, 53% did not expect it.

Lereta also found that while 80% of homeowners understood what an escrow account was and how it was used, only 52% knew how an escrow account worked. Of the homeowners surveyed, 28% are somewhat or are not aware that escrow account changes can affect monthly payments.

How to Prepare for Rising Mortgage Payment Costs

Even amid the rising costs, there are many things homeowners can do to prepare and set themselves up for success. Whether you own a home or are looking to buy soon, having a plan and a budget can help you weather any financial storm. 

Shop for insurance yearly

With insurance premiums set to increase, continually shopping for insurance can help you get the best cost. Comparing providers online yearly you can compare quotes, ensure you’re getting the best coverage and potentially find a lower premium.

Revisit your budget

For many homeowners, even a 10% increase in their monthly mortgage payment could be a hardship. While experts recommend spending only 30% of one’s income on housing, many homeowners are spending more than that. So what is one to do? A great option is to revisit your budget and identify ways to set aside more money each month in anticipation of mortgage payment and/or insurance premium increases. 

Have questions about escrow or mortgage payments? Our friendly team is here to help! We also have a dedicated financial education team who can answer any questions you might have and help you find a budget that works best for you. Contact us today!

Get help on your financial journey

Are you looking for ways to boost your credit score, increase your savings and reduce debt? Check out the Fox Money Blueprint blog post series. There you can get ideas for revamping your budget, taking advantage of the debt snowball to pay down debt and much more.