Many homeowners throughout South Florida are surprised when they receive notices of escrow shortages after being notified by mortgage lenders that their monthly payments would increase.

That was the case for Kenneth Rankel, 58, and her husband when they received a notice from their mortgage lender last week that they were short on escrow as a result of rising insurance costs and therefore their payout. monthly would increase by approximately $323. one month.

“The insurance company sent us a notice in November that the insurance was going up,” Rankel said. “I just wasn’t too sure how much it was going to be.”

The couple is not alone. Primarily due to rising insurance costs and, in some cases, rising property taxes, many homeowners are receiving notice that their monthly payments will be significantly higher this year due to a shortage of security deposits.

“I’ve probably had a half dozen calls personally so far in the last month about what’s going on,” said Stephen McWilliam, president and broker of Florida State Realty Group & Florida State Mortgage Group. “They don’t understand why it happened and they just see their mortgage payment go up.”

A homeowner’s mortgage payment consists of two parts: the actual loan amount (principal and interest) and the security deposit portion of the bill.

The security deposit payment is the amount that goes toward costs like property taxes, property insurance, and mortgage insurance, plus a little extra as a cushion to try to make sure the account doesn’t go negative. The mortgage lender will collect the estimated amount of property tax and insurance each month before the annual bill.

“Typically, the bank or servicers will submit an escrow analysis annually. That will show you how your escrow account did last year and whether or not you had enough escrow to cover the costs of taxes and insurance,” said JC de Ona, president of the southeast Florida division. from Centennial Bank.

Some years there are not many changes, but other years, homeowners may receive notices of escrow shortages, or a notice that there are not enough funds in the account to cover the amount owed, due to an unplanned increase on insurance or taxes.

Let’s say a homeowner was saving $200 a month in her escrow account because her insurance bill was $2,400 a year. Now, come the new year, his house insurance policy has doubled and is now $4,800 a year.

Not only does the lender have to pay the $4,800 up front, but they also have to start budgeting for the perceived cost for the coming year.

“It’s almost going to be double because they were short last year and they have to prepare for next year. A difference of $200 is going to increase to $400 because you missed it last year,” said Craig Garcia, president of Capital Partners Mortgage in Coral Springs.

For homeowners who received notices of escrow shortages, the most likely reason is due to increased insurance costs.

“What I’m seeing this year is insurance costs going up,” de Ona said. “In general, we are seeing increases of between 10 and 20% in insurance premiums.”

For Rankel, the homeowners insurance premium has shot up by more than $3,000 a year to cost them just over $9,000.

And Rebecca Hawronksy and her husband, who live in Cooper City, received a notice that their insurance would increase by 40%.

According to state data, last year average annual premiums exceeded $4,000 in five Florida counties, including Broward, Palm Beach, Miami-Dade and Monroe. Many homeowners have seen their insurance premiums double in the last five years to triple the national average.

Another reason, though less likely since many homeowners have a homestead exemption, could be an increase in property taxes. It’s more likely to happen to a homeowner who bought a home in the last year or two, or to those who might own an investment property.

“Something our office often sees is that a homeowner’s first tax bill may reflect the exemptions accrued by the previous homeowner. The second property tax bill after the new resident has owned the property for a full year would reflect the current owner’s exemptions, and often those savings may be less than the previous owner,” he noted. Palm Beach County Property Appraiser’s Office.

It is difficult to prepare for an increase in insurance premiums, since it is unknown how much they could increase each year. If possible, experts suggest setting aside some reserves to cover any policy changes.

But for many homeowners, rising costs force them to cut back on what they can to make up the difference. Rankel is reworking his monthly budget to reduce it, including getting a less expensive phone plan.

“We are doing everything we can to lessen the impact,” Rankel said.

For homebuyers in general, it’s important to remember that taxes are likely to change on a property they buy and to keep that in mind when buying a home, said Patty DaSilva, a broker with Green Realty Properties in Cooper City.

The Broward County Property Appraiser’s Office has a calculator on its website to help homebuyers determine how much they will pay in taxes on the home they buy, as does the Palm Beach County Property Appraiser’s Office. .