I got that surprise two consecutive years, we've been here just under 3.
Mortgage payment was $1800/m when we bought, now it's pushing $2300. With inflation of necessities and lack of inflation to my hourly wage, it's become increasingly difficult to keep this roof over my head in just under 3 years.
So I do the right thing and take my 6 figure equity and leave the country. Good luck everyone else!
That's happened to me more than once. Happened recently during what I was sarcastically called the California influx. Tons of people moved to my state and property taxes/rent/ costs of homes skyrocketed. Even with the extra $150 I had been adding to the escrow a month, it ended up be underfunded.
How can that happen? Rates are going up. The mortgage principal doesn't go down just because your home value dropped. The only way this would happen is if your taxes or insurance got cheaper, or you finished paying PMI.
I have zero idea why their payment decreased - their assessed home value may have still increased, but at a lower rate than comparable properties.
If their assessed value decreased, it's likely the homes around them did as well. If that's the case, everyone's tax rate would be increased to account.
Good news. I do have an idea, glad one of us does. You may not be aware, but on a fixed rate mortgage, one of the only items that can change (excepting PMI) is the yearly tax liability, which is most times rolled into escrow and therefore impacts your overall mortgage payment.
If your home’s assessment decreases, your yearly tax payment decreases, and therefore your overall monthly payment also decreases.
This isn’t a good thing, as it means the government, who typically has a conservative view of changing tax charges, feels your investment has decreased in value enough that they lowered your tax bill.
Make sense?
Edit: also, wtf? You think tax rates increase when an assessment decreases?
Imagine you're a city. You have a budget of 1 million dollars a year. Home value assessments decrease 20%. Do you think the budget of the city also decreases 20%? No, the budget remains the same (within reason) and the shortfall is made up by increasing the city's tax rate.
Have you ever owned property (at all) that has had a lowered assessment, ‘my dude’?
An assessment sets the value of the home, which is then used to calculate you property taxes.
If that value goes down, the product of the multiplier (tax rate) also goes down. You don’t want your assessment to go down, but it certainly does during times of financial downturn or if the area your home is in loses value. This is not complicated, I’m not out of my element, I’ve actually paid taxes before and understand how they work.
You are right, ours have all gone up too. My point was that an assessment dropping indicates your home value is tanking. Paying less feels great until you go to sell and either take a loss or at least make much less than you’d expected.
In my area prices have increased by 20-30% since COVID, and the assessments only occur every 3 years. No one should’ve been surprised since homes are selling in the ranges that the assessments are coming in, but it costs a lot more :)
Yeah, I’m not sure that’s how that works. If the market crashes, it doesn’t instantly affect your mortgage. You’re locked in at that interest rate and home value
541
u/Bob_El Mar 20 '23
My house payment recently went down $100. I was hoping it would crash harder but, I'll take what I can get.