When newlyweds Dallin and Emma Wood were shopping for their first home near Salt Lake City this spring, their real estate agent told them to expect extra costs once they became owners.
“He explained very clearly that taxes are going to fluctuate,” said Dallin, a 26-year-old engineer. And in an area where hail is a constant danger, the Woods knew all too well how important property insurance is.
Thanks to those conversations, “we feel prepared,” he told USA TODAY. “My wife and I would have never felt comfortable buying a house if we didn’t know what the worst-case scenario might be.”
As tax levies and insurance premiums surge, the possibility of a “worst-case scenario” does, as well. Even as the vast majority of Americans continue to opt for fixed-rate mortgages, the ancillary costs of ownership fluctuate – mainly upwards.
Those stresses have been on full display in the escrow accounts that mortgage companies maintain in order to pay taxes and insurance on behalf of homeowners. An analysis of escrow accounts by real estate data provider Cotality for USA TODAY found that as many as 65% of all homeowners have escrow shortages, at an average of $2,157.
