6 Reasons Why Your Monthly Mortgage Payment Could Change

It’s important that you check your monthly mortgage statement for any changes to avoid unwanted surprises.

As a homeowner, you may notice some changes in your mortgage statement as you repay it each month. Your mortgage payments could increase or decrease depending on what type of loan you have. Whether your payments increase or decrease, it’s important that you understand what’s going on with your monthly mortgage statement to avoid any unwanted surprises along the way.

Important: If the COVID-19 pandemic affects your monthly payments, call your servicer immediately and ask what relief is available to you. Visit the LendUS Loan Forbearance page to get more information.

Below are possible reasons why your monthly mortgage payment could change:

  1. The interest rate in your ARM has changed – If you have an adjustable-rate mortgage, or ARM, where you initially have a lower interest rate, your monthly payments may likely increase once the introductory rate changes. Unlike a fixed-rate mortgage, ARM rates tend to adjust over time.
  2. You start paying the principal on your loan after paying the interest – If you’re initially paying for the interest of your loan, your monthly payments will start to increase once you start paying the principal. The principal is the actual amount that you borrowed to buy a home.
  3. There could be problems with your escrow account – If you’re paying property taxes and insurances through an escrow account, keep in mind that you should get a notification if there are changes with these payments. Aside from an increase in property taxes, your payments could also increase if your servicer buys insurance on your behalf.
  4. You stopped paying your private mortgage insurance (PMI) – PMI is a requirement if you made a small down payment when buying your home. Once your home equity reaches 20 percent or more, you may request to cancel your PMI which will reduce your monthly payments.
  5. Your servicer charges you additional fees – In some situations, your servicer may charge you additional fees. Your servicer, for example, may charge you late fees if you fail to settle your payments on time. Regularly check your statement or any correspondence you recently received from your servicer and ask for an explanation if there are fees that you don’t understand.
  6. Your servicer simply made a mistake – Like any other company, servicing companies also make mistakes that could change your monthly payment. Immediately notify your servicer about the error and ask to send you the correct statement. When making a call, jot down all the dates, names, and reference numbers for future reference. Sending a notice of error is worth considering if your servicer doesn’t fix the error on your mortgage statement.

Notify your servicer of any changes in your monthly statement. If you’re making a dispute, your servicer could either correct the error, investigate your dispute, ask you for additional information, or notify you of additional days to investigate your claim. Ask for a detailed explanation The Consumer Financial Protection Bureau (CFPB) has a checklist that you can use to help you navigate your mortgage statement as you make your monthly payments.

When sending a dispute to your servicer, it’s ideal that you continue making payments as they come due.

Conclusion

As a homeowner, it’s important to note that your payments could change as you pay your mortgage. Understanding these changes could help you avoid any unwanted surprises along the way. Immediately notify your servicer if there are changes in your statement that you don’t understand.