When discussions arise around here regarding rent increases, sometimes I see people advising renters to purchase their own home so they will have a stable monthly payment that does not increase year after year.
I think that only works if you live in an area of a country or the world that does not have rapidly
-increasing property values that are taxed at higher and higher levels.
We bought our house in 2016 and within a year, our monthly payment went up by almost $500 because they had based the escrow withholdings on older information and had to make up the difference twice withhold more because of updated appraisals.
One year ago, we took advantage of low interest rates and refinanced. We were able to lower a monthly payment by $400, so almost to the same point that it was when we bought in late 2016. I should also add that our loan officer neglected to make a loan for 27 years as we had requested. By the time all the paperwork was done, we just went ahead and signed off on it but it added back those three years onto how long we will have to pay our house.
We just now received an escrow update from our loan servicer that says the same thing happened… The under collected last year, they have to make up the difference this year plus they have to collect extra for the values from last year. Our appraisals have not been sent out yet; they will be released on April 15. What that means is it next year, the same thing is going to happen. The loan servicer will have not withheld enough money, and they will have to compound the increase in taxes plus the amount that they under collected. So our payments are going up by $300 a month again. They will likely increase by close to the same amount next year.
There is no getting ahead for the middle class.