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Q: Why does my mortgage payment increase each year? I thought it was fixed.

A: The only fixed part of your mortgage payment is the Principal and Interest. Taxes and Insurance, also known as escrows, are what change each year. If you have online banking with your mortgage, you can see if you have an escrow shortage each month. You can either wait until the end of the year when your servicer will perform their annual review and then increase your mortgage payment to make up for the shortage, or you can pay extra towards your escrow each month. You may get a refund when your servicer performs its annual review. 

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