Mortgage Company Raise Our Monthly Payment

My mortgage company stated they can raise our monthly rate in Texas even though we signed a 30 year fixed rate mortgage, is this possible?

2 Answers

They can raise your payment if your annual taxes or insurance premiums were higher than the previous year, or if you did not have enough money in your escrow account to pay these bills, and the lender advanced the funds.  But a fixed rate mortgage is just that, fixed.  Your principal and interest remains exactly the same as shown on your Note and cannot change whether you are in Texas or any other state in the country. 

If you are sure that your payment increase is due to the lender changing your interest rate on a fixed rate, there are many sources available to you. First, make sure to contact your Lender in writing requesting an explanation and attach a copy of your Mortgage Note.  You can also contact the Texas Department of Savings and Mortgage Lending at http://www.sml.state.tx.us/, HUD or the Texas Attorney General. 

If you have a fixed rate note, the interest rate cannot be increased. However, it is possible your monthly PAYMENTS will increase, if your mortgage payment includes taxes and/or insurance. If the taxes or insurance premiums rise, then your monthly payment will rise. The 30-year fixed rate mortgage means the INTEREST RATE is fixed for 30 years, but other items paid monthly (such as escrow items) are subject to change over time. This can affect your monthly payment, even if your interest rate stays the same. The state is immaterial -- a fixed rate note cannot have an interest rate increase in any state, so the fact you are in Texas isn't relevant.