A First-Time Buyer Was Shocked When Their Escrow Shot Up. Turns Out, A Fixed Rate Doesn't Protect You From Tax And Insurance Hikes
“My homeowners insurance went from $1,400 to $2,800 over a three-year span,” one person said. “I shopped and found insurance with the same coverage for $1,300 again, only to be told they wouldn't cover the house due to them feeling the roof was old. I was forced to spend $12,000 for a new roof in 30 days.”
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What First-Time Buyers Can Do
The good news is that there are options. Homeowners can shop around for better insurance rates, dispute property tax assessments, and ask lenders for a broker price opinion instead of a full appraisal to remove PMI.
“I requested the PMI to be removed and was given two options,” one person explained. “I went with the BPO and it was only $140. Ten days later, my PMI was removed.”
Others suggested reviewing escrow statements annually and proactively paying shortages to avoid ballooning payments. “If you pay the $1200 shortfall, you will owe $100 more a month. If you don’t pay it off all at once, you will owe $200 more a month because you’re paying the shortfall plus the extra $100 monthly,” one commenter warned.
As for the original poster, she ended the thread with a lesson for others: “As much as some people like to act like home buying and everything involved is intuitive and common sense, it’s really not. So I hope you all can learn from our boo boo.”
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This article A First-Time Buyer Was Shocked When Their Escrow Shot Up. Turns Out, A Fixed Rate Doesn't Protect You From Tax And Insurance Hikes originally appeared on Benzinga.com
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