<prompt> Human: So my wife and I bought our first house last year and are paying 1,093mo all said and done sans utilities. Every month, however, we pay an extra 60 ish so that we cut Pennymac, our mortgage company, a monthly check for 1,150. We have no penalty for paying off our mortgage early. Yesterday we got a letter saying we have an escrow deficiency of 1,000. We are completely flabbergasted. Our closing attorney, who was very knowledgeable, told us when we closed that our monthly all-in would be 1,093 and we could pay extra. Weve paid extra every month. So what gives? Why do they want more money despite us paying extra every month? I will be in contact with Pennymac after I get off work at 5 today, but if you could give me any advice before going into this phone call, thatd be great. Thanks all!Assistant: Your extra payments are likely being applied to the principal, and not to escrow.It sounds like your escrow needs were underestimated. Thats pretty common.What items do you pay for out of escrow? Home insurance? Taxes? HOA dues? Any or all of those items could have been miscalculated in the original numbers, and they are all likely to change throughout the life of the mortgage.Human: Not sure on all the numbers as Im away from the paperwork but I know we have no HOA. Thanks for getting back. Pretty crappy to hear that these numbers change but I guess thats life.  <response>: Property taxes change annually for most folks because the home and land are reassessed every year. The tax rates can also increase or decrease at the whim of elected local leadership.Insurance rates never stay the same. If you stay with the same insurance company, your rate will continually rise or the same coverage. If you switch insurance companies, your rate will likely go down for a while and then start rising again.The only thing that is fixed in a fixed-rate mortgage is principal and interest payments. Everything else is variable, and your mortgage company will notify you of changes to your monthly payment andor required one-time payments to stabilize your escrow account. 