Fixed-rate mortgage payments are highly sought after. Everyone wants one if it’s possible for them to obtain. Why? The aforementioned should state the obvious. Fixed-rate. This should mean that you’re locked in to a monthly payment that doesn’t go up or down until the loan is paid in full. Even if it’s paid off early, the monthly amount due stays the same.
Right? Wrong. Believe it or not, many homeowners are going through a transitional period as we speak due to their mortgage payments increasing. What’s causing the increase? Not the actual interest rate, but rather the property taxes and homeowner's insurance that was consolidated into the overall mortgage payment.
According to wisebread.com, "When you take out a mortgage loan, your lender might require you to sign up for an escrow arrangement. Under an escrow plan, you send extra dollars to your lender each month to cover the estimated property taxes you'll need to pay each year on your home. When your taxes are due, your lender makes the payments on your behalf, using the money built up in your escrow account."
What's troublesome about this for some is that property taxes might go up in any given year, especially if you make home improvements.
Depending on your property taxes, you could pay hundreds more a month, in addition to the fixed-rate mortgage loan payment. It's all rolled into one so it seems like you're paying only the loan payment.
Also according to wisebread.com, "The other variable of your mortgage payment is your homeowner's insurance. The cost of homeowner's insurance varies across the country, but you can expect to pay about $1,000 a year. Lenders often request that homeowners pay this, too, out of an escrow account. Just as with property taxes, you'll pay a bit extra each month to cover the estimated annual cost of your homeowner's insurance. Your lender will make your payment on your behalf with these dollars once your payment comes due."
If you have a water leak or a new roof installed and it was covered by your insurance, it's likely that will cause your monthly mortgage payment to go up, as well. Again, it's rolled into one big payment that might seem like it's just a mortgage loan payment.
With the lower interest rates and increased sales, it's a great time for buyers to really consider purchasing a home before the end of this year. With time left to search, as well as sell current homes, now's a great time to contact our North Raleigh real estate team!
Also, if you’re considering selling your home, it's time to act now! Contact Roark Premier Team today and get started with the process of listing your home on the North Raleigh real estate market. We guarantee to sell your home in 59 days or less. If we don’t, the listing fee is waived! So what are you waiting for?
Call now! Our real estate agent is standing by to help you get your home sold during one of the busiest times of the year for North Raleigh real estate!