Are you concerned about how higher property taxes will affect your mortgage payment? Don’t worry – it’s a common concern. I’ll help you understand the effect of higher property taxes on your mortgage payment.
Let’s check out how higher property taxes affect your mortgage payment and what steps you can take to prepare.
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Each October…
Each year, in October, the homeowner receives a proposed tax bill for the following year. Property taxes are due two times a year. The first, one-half of your property taxes are due on April 15th and the 2nd half are due on October 15th of each year.
If you mortgage payment includes your property taxes, then the monthly payment will be affected. The mortgage company collects a portion of your mortgage payment each month. The mortgage company keeps these funds in an escrow account until it’s time to pay the tax bill.
My taxes increased…
If your property taxes increase, the mortgage company will adjust the amount collected each month to reflect the new tax rate. This can result in a higher mortgage payment. As a result, you will now be paying more towards your property taxes each month. The mortgage company will inform you of the adjustment and new mortgage payment amount.
How do I prepare?
Fortunately, you can take steps to prepare for higher property taxes and adjust your mortgage payment accordingly. First, review the proposed tax bill when it’s sent out each year in October. If there are any discrepancies, contact your local tax assessor’s office right away. In addition, you also have the option to appeal your value without going to Tax Court. However, if you miss the deadline, you will need to go to Tax Court to appeal the value.
It’s important to budget for the increase in your mortgage payment. Don’t have a saving and spending plan yet? Here’s 6 motivational reasons to create a saving and spending plan for your money. Speak to your mortgage company about how much your payment will increase so you can adjust your budget accordingly. In the event you don’t contact your mortgage company, or notice an increase in your taxes, there may be a short fall. A short fall is when the mortgage company does not have enough money in escrow to pay the taxes. As a result, the mortgage company may require you to make up the difference. Ultimately, it’s best to stay on top of the amount you have paid in property taxes in the past and proposed taxes for the upcoming year.
One last thing…
Understanding how higher property taxes affect your mortgage payment is key to budgeting for them. The mortgage company will adjust the amount collected each month, resulting in a higher mortgage payment. To prepare for this, review the proposed tax bill when you receive it. Finally, speak to your mortgage company about how much additional you may be required to pay each month, and adjust your budget accordingly. Knowing the effect of higher property taxes can have on your mortgage payment will help you make informed decisions and keep your mortgage payments in check.
Thank you for reading! Hope this article helps. Good luck!
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