Mortgage questions, answered
Real questions borrowers ask, answered in plain English by The Mortgage Advisory, a mortgage lender and broker licensed in California, Texas, Florida, and Colorado (NMLS #1549739).
5 answers in Common Fees
Clear searchWhat closing costs and fees do homebuyers pay, and how does escrow work?
Buyers commonly pay about 2% to 5% of the loan amount in closing costs, for lender fees, appraisal, title, recording, and prepaid taxes and insurance. Escrow means two things: a neutral third party that holds money and documents until closing, and the account your lender uses to pay your property taxes and insurance afterward. The Mortgage Advisory shows every fee on your Loan Estimate before you commit.
Why did my escrow come up short and my mortgage payment go up?
Almost always because your property taxes or homeowners insurance went up. Once a year, your servicer reviews your escrow account; if it paid out more than it collected, you'll see a shortage, and your payment goes up to cover both the shortage (usually spread over 12 months) and the higher bills going forward. The Mortgage Advisory can help you read the statement and look for ways to lower the cost.
Why aren't my extra mortgage payments going to principal, and how do I make sure they do?
Many servicers apply extra money to your next payment or to escrow unless you clearly mark it as principal only. To make sure it lowers your balance, use the servicer's 'additional principal' option or write 'apply to principal' on the payment, then check your next statement. The Mortgage Advisory can show you how much time and interest regular extra payments could save.
Why was my mortgage sold to another company, and what are my rights with the new servicer?
It's normal: lenders often sell loans or transfer who collects payments, and it doesn't change your rate, balance, or terms. You should get written notice from both the old and new companies, and for 60 days after the switch you can't be charged a late fee if you accidentally pay the old one on time. The Mortgage Advisory tells clients upfront who will service their loan when we know.
Why did mortgage rates just jump, and should I lock my rate now or wait?
Mortgage rates follow the 10-year Treasury bond, not the Fed directly (add roughly 1.5% to 2.25% to the 10-year yield for a ballpark 30-year rate), so they can jump fast on inflation news or world events, and nobody can reliably call the next move. At The Mortgage Advisory, our rule of thumb is simple: if you're under contract and the payment works for your budget today, lock it and stop worrying about the headlines.