A question asked by mostly first time home buyers, is this... if my interest rate is fixed, then why did my payment go up?? Most mortgages, whether conventional or FHA, VA or USDA, include impounds or reserves to pay the tax bill and home owners insurance premium when they come due. The lender takes what they estimate the bills to be for the year, add a few months extra, and divide it by 12 months... this amount is then added to your monthly payment. When it's time to pay the bill, your savings account (Escrow account) will have the necessary funds in there to pay it so you don't have to write a check. If your taxes or insurance go up, which they most likely will, then the lender has to have you properly fund this escrow account, so next year, there is enough in there to pay those bills.. but the biggest increase is when someone purchases a new home... In my state, Arizona, taxes are paid based on valuations 1 1/2 to 2 years in the past... So, if you purchase a newly constructed home, and you go back 2 years, that lot where your new home now sits, was a dirt lot... and the taxes reflected a dirt lot... so your taxes are really low... move forward 2 years when your now paying for the valuation of an improved lot, IE, A home now exists there, then your in for a big surprise... the taxes and be 8 to 10 times more.. and this can cause a drastic increase in your monthly payment.. there should be a law requiring new home builders to disclose this, but unfortunately there isn't .... WilliamAcres.com