Homeowners across Albuquerque, Rio Rancho, and surrounding New Mexico communities are receiving calls from mortgage companies warning them about escrow shortages and suggesting refinancing as the solution. While refinancing can sometimes help homeowners, local mortgage expert Ben Lucero of Indigo Mortgage says many of these calls can be misleading and homeowners should proceed carefully.

Recently, Ben Lucero spoke with homeowners who were told their property taxes were behind and their escrow accounts were short. According to the callers, the mortgage companies advised refinancing to catch up on taxes and start a new escrow account. While this may sound like a reasonable solution, Ben Lucero says many homeowners can resolve the issue without taking on the cost of a brand-new mortgage.

What Is an Escrow Shortage?

An escrow account is the portion of your mortgage payment set aside for property taxes and homeowners insurance. Your mortgage company collects this money monthly and pays those bills on your behalf when they come due.

An escrow shortage happens when taxes or insurance premiums increase more than expected. This is becoming more common throughout New Mexico as property values continue to rise.

According to Ben Lucero, escrow shortages are often normal and do not automatically mean homeowners are in financial trouble.

Why Refinancing Is Not Always the Answer

Some mortgage companies are using escrow shortages as an opportunity to push homeowners into refinancing. However, refinancing can come with:

• Closing costs
• Loan fees
• Higher interest rates
• Extended loan terms

For homeowners who secured historically low mortgage rates over the last several years, refinancing today could actually increase long-term costs.

Ben Lucero explains that many homeowners have simpler options available, including:

• Paying the shortage directly
• Spreading the shortage across future payments
• Allowing the servicer to slightly increase monthly escrow payments

These options often solve the issue without replacing the mortgage entirely.

Why Escrow Shortages Happen Repeatedly

Many homeowners are surprised when escrow shortages occur year after year. However, property taxes and insurance premiums rarely stay the same.

As home values rise in Albuquerque, Rio Rancho, Corrales, and Santa Fe, counties reassess property values and taxes increase. Insurance premiums can also rise because of inflation and higher construction costs.

Because counties are often behind on assessments, escrow calculations can lag as well. According to Ben Lucero, this can create recurring shortages even when homeowners consistently make their mortgage payments on time.

Be Careful of High-Pressure Calls

Homeowners should be cautious when receiving unsolicited calls encouraging immediate refinancing.

Some warning signs include:

• Pressure to act quickly
• Claims that refinancing is the only option
• Little explanation of alternatives
• Focus only on lowering monthly payments
• Lack of transparency about fees and costs

A trustworthy mortgage professional should take time to explain all available solutions—not just refinancing.

When Refinancing Does Make Sense

While Ben Lucero encourages caution, refinancing can still be beneficial in the right situation.

A refinance may help homeowners who want to:

• Lower their interest rate
• Consolidate debt
• Access home equity
• Remove mortgage insurance
• Change loan terms

The key is making sure the refinance improves your overall financial picture rather than simply solving a temporary escrow shortage.

Why Local Mortgage Advice Matters

Mortgage decisions are important, and every homeowner’s financial situation is different. Working with a local mortgage professional like Ben Lucero at Indigo Mortgage allows homeowners to receive personalized guidance based on New Mexico’s housing market and tax trends.

Rather than pushing unnecessary refinancing, Ben Lucero focuses on helping homeowners understand their options and make informed decisions.

If you receive a call about refinancing because of an escrow shortage, it may be worth getting a second opinion before signing paperwork.

Talk to Ben Lucero at Indigo Mortgage

If you have questions about escrow shortages, refinancing, property taxes, or mortgage planning, Ben Lucero and Indigo Mortgage are available to help homeowners throughout Albuquerque, Rio Rancho, Corrales, and surrounding New Mexico communities.

Before refinancing your mortgage, make sure you fully understand the costs, benefits, and alternatives. Honest advice today could save you thousands over the life of your loan.

FAQ

What causes an escrow shortage?

Escrow shortages usually happen when property taxes or homeowners insurance premiums increase more than expected.

Do I have to refinance because of an escrow shortage?

No. Many homeowners can pay the shortage directly or spread the repayment over future payments.

Can refinancing increase my mortgage costs?

Yes. Refinancing may include closing costs, higher interest rates, or a longer loan term.

Is an escrow shortage normal?

Yes. Escrow shortages are common, especially when property values and taxes increase.

Should I trust unsolicited refinance calls?

Homeowners should be cautious and always ask questions before agreeing to refinance.

Who can I talk to about refinancing in New Mexico?

Ben Lucero at Indigo Mortgage can help homeowners review their mortgage situation and determine whether refinancing truly makes sense.