Why Your Mortgage Payment Could Increase After Buying a Home in Florida

You bought a home with a fixed-rate mortgage, so your monthly payment can't go up, right?

Not necessarily.

Your principal and interest may be fixed, but if your property taxes or homeowners insurance are paid through an escrow account, changes in those expenses can change your total monthly mortgage payment.

For Florida homeowners, one increase that can catch new buyers by surprise happens after the property is reassessed following a sale.

The Property Taxes You Saw When You Bought the Home May Not Be Your Property Taxes

When you're looking at a home, the current property tax bill reflects the existing owner's assessed value and any exemptions that owner may have.

That can include Florida's Homestead Exemption and years of protection under the Save Our Homes assessment limitation.

Those benefits don't simply transfer to the new owner.

After a change in ownership, the property is generally reassessed for the following tax year. Your new assessed value and exemptions can produce a tax bill that looks very different from the one associated with the property when you purchased it.

That's why I caution buyers against assuming the seller's current tax bill is what they'll pay after closing.

What Does Your TRIM Notice Tell You?

Florida property owners receive a TRIM notice, or Notice of Proposed Property Taxes, before the final property tax bill is issued.

It's worth opening.

Your TRIM notice provides information about your property's assessed value, exemptions and proposed property taxes.

For recent buyers, it's also an opportunity to compare the proposed taxes with what your mortgage servicer is currently collecting for property taxes through your escrow account.

How an Escrow Shortage Can Increase Your Mortgage Payment

If your mortgage company estimated your property taxes using a lower amount and the actual tax bill is higher, there may not be enough money in your escrow account to pay the bill.

That's an escrow shortage.

Your mortgage servicer may then need to collect additional money to make up that shortage while also increasing the amount it collects each month for the higher tax bill going forward.

The result can be a noticeable increase in your monthly mortgage payment.

Your fixed interest rate didn't change.

Your taxes and escrow did.

What Should You Do When You Receive Your TRIM Notice?

If you have an escrow account, compare the proposed property tax amount on your TRIM notice with the amount your mortgage servicer is currently collecting for taxes.

If the numbers don't appear to line up, contact your mortgage servicer and ask about your escrow account.

Finding a potential shortage early gives you time to understand what's happening and prepare for a possible payment change instead of being surprised later.

Frequently Asked Questions

Can my mortgage payment increase if I have a fixed-rate mortgage?

Yes. With a fixed-rate mortgage, your principal and interest payment generally remains fixed. However, your total monthly payment can change if expenses paid through escrow, such as property taxes or homeowners insurance, increase.

Why can property taxes increase after I buy a home in Florida?

The previous owner's property taxes may have been based on a lower assessed value and exemptions, including Homestead Exemption and Save Our Homes protections. Following a change in ownership, the property is generally reassessed for the next tax year, and the previous owner's exemptions and Save Our Homes benefit don't transfer to you.

What is a TRIM notice in Florida?

TRIM stands for Truth in Millage. The Notice of Proposed Property Taxes provides information about your property's assessed value, exemptions, proposed millage rates and estimated property taxes before the final tax bill is issued.

Does a TRIM notice mean that is exactly what I will owe?

No. It is a notice of proposed property taxes, not the final tax bill. However, it provides valuable information that can help homeowners anticipate their upcoming property tax obligation.

What should a recent Florida homebuyer do with a TRIM notice?

Review the proposed property taxes and, if your taxes are escrowed, compare them with what your mortgage servicer is collecting. If there appears to be a significant difference, contact your mortgage servicer to discuss your escrow account.

A Little Preparation Can Prevent a Big Surprise

Property taxes aren't the most exciting part of buying a home, but understanding how they affect your mortgage payment matters.

If you're buying a home in St. Petersburg or Pinellas County, I help my clients look beyond the purchase price and understand the practical costs and issues that can affect homeownership after closing.

I'm here to help.

About the Author

Terri Labrie is a REALTOR® with Epique Realty serving St. Petersburg, Pinellas County and surrounding Tampa Bay communities. She holds the ABR®, SRES®, SRS and PSA designations and brings approximately 20 years of prior paralegal experience to her real estate practice. Her approach focuses on helping buyers and sellers understand not just the transaction, but the details that can affect them before, during and after closing.