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My Friend Texted Me

Why Your Monthly Payment Changes

• Most people think the mortgage payment goes straight to the lender and any increase is the lenders fault

• Your mortgage payment is made up of several different payments that could change Explain escrows — the escrow account isn’t what made your payment go up

This Makes Your Payment Go Up

• Property Taxes
• Property taxes are based on assessed value and will go up with the property value Appreciation is good, but you also have to pay taxes on your home’s higher value
• Under estimated taxes Talk about remedies to each of these under estimates
• New construction
• Tax reductions from previous owner
• What you can do → challenge property tax bill

• Home Owner’s Insurance
• Your property’s replacement value goes up when your home value goes up
• Insurance company changes (e.g. Florida’s massive increase in HOI costs)
• What you can do → shop for insurance each year

• HOA

• Utilities

What Doesn’t Change?

So Renting Is Better?

Average Nationwide YoY Rent Increase

• winthehouseyoulove.com/advisor
• Use code KYLE for 20% off

• Even with increasing tax and insurance payments, purchasing doesn’t “make” you money, but it is often a lower total cost than renting

What You Should Do

• Don’t max out your house payment YOU are the one who decides your budget, not your lender

• Choose a fixed rate mortgage Unless you have a lot of cash, high income, and know the risks fully of an ARM

• Don’t count on rates to decrease — plan for your payment to never get lower

• Have a 3 month emergency fund before you buy

• Be careful buying if you expect an income decrease in the future (e.g. changing jobs, spouse taking off work (child/sickness, etc), counting on roommates)

• Especially for your first home, keep it well within budget. You don’t need the dream home as your starter home