Home Buying in Manhattan>Question Details

Traya, Home Owner in Manhattan, KS

why would my interest rate drop, but my mortgage payment increase?

Asked by Traya, Manhattan, KS Fri Jan 14, 2011

I've been in my house for 3 yrs-initial adjustable rate which would change in three years. My interest dropped from 6.25 to 4.28% but my mortgage payment increased by. I want to sell but need to fix up some things-kitchen, esp.-feeling stuck. . .

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Your property taxes or your insurance premium has increased. Each year on January 1 the county assessor sets a new appraised value for your home based on the comparable sales in your neighborhood and each November the new mill levy is established. Both can go up or down independently. The effect is felt the most when they both go up. The Mil Levy for Manhattan/USD 383 rose from 117.904 in 2009 to 124.981 in 2010. This can be more than enough to offset the payment reduction from the lowered interest rate. Good thing is that everyone has to pay taxes so this shouldn't have an adverse effect on the saleability of your home. Don't let this make you feel stuck. However, you should probably consult a real estate professional for advice specific to your property and situation.
1 vote Thank Flag Link Sat Jan 15, 2011
Without knowing all of the details accept the ones given. You may want to check if your property taxes have increased or your insurance, if these are part of your monthly payment. A quick call to your lender should shed some light on the situation.
1 vote Thank Flag Link Fri Jan 14, 2011
Call your lender. Without the details of your loan I would only be able to speculate. In addition to what was offered were you paying interest only and now that option has changed to principal and interest?
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Fri May 20, 2011
If you would like to check the current and past years county assessed value for you property to see if in fact that is what has caused the change, you can visit the official City of Manhattan website and click the Community GIS map link on the bottom left side of the page. This link will direct you to the county information on your property. I suggest that you search by parcel search using your last name rather than address search. Parcel search is much more exact and user friendly. If you would like help finding your current value or using this website, give me a call 785-341-6806. I'd be happy to help!

0 votes Thank Flag Link Fri May 20, 2011
Your mortgage expenses may have increase ie, property taxes, home owners insurance, water and sewer , etc and there is not enough residual to cover those expenses if they are paid directly by your mortgage company.
0 votes Thank Flag Link Thu May 19, 2011
It sounds like exactly what happens to me every few years. Property taxes went up, Wells Fargo wants 2 months taxes in escrow, they nail me for a lump payment to cover that and also increase my monthly payment. Want I want to know is how to get Wells Fargo OUT of my town property taxes. I paid property tax in tha town for 20 years before I got a mortgage from Wells Fargo. My credit score is 806, but I'm moving closer to not being able to make my payments because they are tied to my property taxes. Does ANYBODY out there know how to disconnect the bank from my taxes and let me handle the town on my own?
0 votes Thank Flag Link Thu May 19, 2011
There may be a shortage in your escrow account to cover taxes, insurance and other fees that your lender pays on your behalf.
0 votes Thank Flag Link Sat Jan 15, 2011
Unless all the documents are presented for review difficult to render a virtual opinion. Why don't you contact the lender direct who can answer all your question(s)

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Sat Jan 15, 2011
Your estimated property taxes and insurance payments for the coming year have gone up so your lender has incresed that component of your monthy mortgage payment to cover these payouts. I too have had that brief joy of opening the letter from the bank saying my mortgage payment has gone down because the interest has gone down. Then I get another letter from my bank saying they need to hold more money back for taxes an insurance each month so the total amount of my mortgage payment will be evenmore than before. "The bank giveth and the bank taketh away"
0 votes Thank Flag Link Sat Jan 15, 2011
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