A couple months ago we got the unwelcome news that our monthly mortgage payment was increasing from $2,789.40 to $3,101.94, effective Aug. 1 (today). That's $312.54 per month! It more than wipes out my and NT's raises this year, which is a big bummer.
We got the notice a few weeks before our Europe vacation and I just couldn't be bothered to look into it at all. I knew from the letter that part of the increase was to make up for an escrow shortage and the rest was to increase our escrow for the future. So the first part of the increase will be temporary (about a year I believe).
So anyway, I'm looking into it now that the higher amount has hit our checking account for the first time.
I looked at our insurance, and it went up from $3,791.88 per year to $4,324.57 per year. It seems this is due to higher valuation of everything. I'm not sure if I can do anything about that; as I recall this was the best deal we could find. Apparently you can save quite a bit if you bundle home with car, but we don't have a car, so that wasn't an option. But I don't know, I may go ahead and sign up for a "Farmer's friendly whatever" to see if there's any way to lower this bill.
Then I checked county property taxes, and they increased from $4,943.56 per year to $5,230.26 per year. Obviously, nothing I can do about that one. They actually value the home way lower than its market value.
Together, these two increases come to about $68.28 per month. Leaving $244.26 of my mortgage payment increase unaccounted for.
I don't have the letter with me at work, so I'm going to check it when I get home to see if that's the temporary increase part of it, or if there's something else contributing to this giant leap.
Researching the mortgage bill increase
August 1st, 2016 at 07:50 pm
August 1st, 2016 at 08:04 pm 1470081887
August 1st, 2016 at 08:08 pm 1470082135
August 1st, 2016 at 08:39 pm 1470083961
Package - Cvg A - Dwelling $720,000
Package - Cov B - Separate Structures $72,000
Package - Cov C - Personal Property $540,000
Package - Cov D - Loss Of Use $288,000
Package - Cov E - Personal Liability $1,000,000
Package - Cov F - Guest Medical $1,000
Extended Replacement Cost 125%
Identity Fraud Expense $30,000
Building Ordinance Or Law Coverage 10%
Sewer & Drain Damage - Higher Limits $10,000
August 1st, 2016 at 09:14 pm 1470086074
Is it because it is a duplex? Do your tenants have renters insurance? With my room mate because i made her get renters insurance my house insurance dropped by $30.
Ask them for a complete break down of what it costs.
Do you have a good agent or ahopping online? Might be worth looking at an insurance broker?
August 1st, 2016 at 09:31 pm 1470087066
I just looked around at what duplex coverage usually entails; if it's owner occupied they typically do a single-home coverage but the personal property coverage is only for the owner unit; the tenants are required to have rental insurance for their property.
I'm going to ask him about the parts you mentioned. He also got back to me about a "new program" where replacement value is $680K; going to ask what that means.
August 1st, 2016 at 10:42 pm 1470091370
I would shop the policy with State Farm, Farmers, and a few other large highly rated companies. Also look at your deductible. You are not going to make a claim for $500 or a similarly small amount, so think about a $2,000 deductible if your lender will permit it.
I would not bundle identity theft insurance with homeowner's insurance, especially if it's expensive.
A broker may be able to help, but you need to be careful about the insurance company providing the coverage. It needs to be strong financially and provide good claims service. It has to be acceptable to your lender as well.
Your tenants need renter's insurance. Given how flaky their financial lives are, you might have trouble convincing them of that. Renter's insurance protects both of you, and most multi-unit landlord policies require it now.
August 1st, 2016 at 11:31 pm 1470094303
August 1st, 2016 at 11:54 pm 1470095651
Here's what the agent says in his latest email:
The new program develops the replacement, you would maintain the extended
replacement cost.
Personal property covers everything in the house that is not part of the
structure, furniture, clothing, appliances, etc.
Separate structures covers the unattached garage.
The limits for personal property, separate structures, are percentages of the
building value. We can increase the limits but cannot lower them.
The sewer & drain coverage premium is $119.71.
Farmers offers an additional discount when combining auto insurance.
So I guess I should ask for a quote at the $680K replacement amount, which should hopefully bring down the personal property and separate structure, and then get comparable quotes from other companies. I do think the main problem is that most people bundle auto, which I cannot do.
August 1st, 2016 at 11:55 pm 1470095721
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August 2nd, 2016 at 02:48 am 1470106105
August 2nd, 2016 at 02:54 am 1470106451
I know for sure our stuff isn't worth half a million. Maybe $100K if we had to replace everything brand new including kitchen and bathroom appliances.
August 2nd, 2016 at 03:11 am 1470107480
August 2nd, 2016 at 03:28 am 1470108507
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August 12th, 2016 at 01:26 pm 1471008409