Monday, June 23, 2008

Got My House Payment Reduced

This month I glanced at our mortgage statement from Countrywide before throwing it into the filing bin. I was dismayed to see that our regular monthly payment (let's call it, Large Sum of Money That Is Hard to Pay) had turned into a Large Sum of Money That Is Hard to Pay PLUS a Small Car Payment.

WTF, right?

I looked closer and it appeared that it was the monthly escrow payment which had increased by $182. The escrow payment goes towards our property taxes and insurance payments, so I assumed that this change was because of a recent tax increase and/or the increase in the assessment of our home.

Now, I am already doing something to try and mitigate the change in our home assessment. In Oak Park, part of Cook county, the village will actually help residents challenge their property assessments, and since we just bought this house, I felt like I could use the help. I have an appointment with the village to try and appeal our assessment tomorrow.

The customer service rep at Countrywide told me that if I am successful in getting my assessment lowered, I should call the bank because they might be able to adjust what they're taking from me each month to put in the tax escrow account.

He also did something for me right away: He took away more than half of that monthly increase that had just hit me.

He said that of the $162 they'd added to my monthly payment, $93 a month was for a special reserve account they were setting up in case taxes increase again. They were planning to charge me $93 a month for a year, just so they could have this cushion of money.

He made it sound like a convenience to me. Ha! You take my money and hold onto it, interest free, just in case my bill goes up in the future?

So, at my request, the $93 a month increase was removed, leaving just a $69 monthly increase, which is much more manageable. And even that might go down if we are successful in lowering our property assessment. I think.

Even though the particulars might be unique to where I live, I thought this little tale could help all homeowners: Your bank might, at any time, tack a little extra money onto your monthly bill for their own convenience. They may use a tax increase as a convenient way to hide what they are doing. You can -- and should -- call them and tell them to cut it out.