Every piece of property has a tax on it, and it is usually based upon the value of the home that sits on the property. Paying property taxes can be confusing, especially for first time homeowners. Any piece of property that you buy will come with a property disclosure that gives you any piece of information on your piece of property that you could imagine, including the annual property tax. It is important to pay your property taxes because if you do not, you may be at risk of losing your home. There are two ways that you can pay your property taxes, and each way has its own benefits depending on a person’s financial situation. Understanding how each method works will help you decide which one is right for you and your specific situation.
The two ways that you can pay your property taxes is through their mortgage, or by paying them yourself. Each one of these can be helpful to people for different reasons. Depending on your financial situation, one may be better than the other. It also does come down to personal preference. One option provides more security than another, but it also means paying more on your mortgage each month. Below are the specifics on each way of paying your property taxes.
The first way to pay your property taxes is through your mortgage on your home. Each month, you will get a bill that states how much you have to pay on your mortgage, which depends on how long your mortgage is for and the interest rate, along with how much the loan was for. This mortgage is through a bank, and most banks offer the homeowner the option of paying a little extra each month to cover their yearly property taxes. The bank will look at the property disclosure and identify how much the property taxes are for your piece of property. They then divide that amount into monthly payments and then add that amount to your mortgage payment. Let’s say that your mortgage payment is $1,500 a month. For the year, your property taxes are $1,200. If you divide $1,200 by twelve (the amount of months in the year) you will get $100. So, you would add $100 to your monthly mortgage payment and get $1,600. The bank will then put this extra $100 into an escrow account, which holds the money until it is due. The assessor’s office will notify the bank when the payments are due, and the bank will take the money from the escrow account and pay the taxes. This method is good for people who want to ensure that their taxes are paid, and it ensures that there are no back taxes. You also do not have to worry about paying a large sum of money when the taxes are due, and breaks them up into more manageable payments.
You can also pay your property taxes on your own. This method is used for many different reasons. People who no longer have a mortgage because they have paid it off and own their home outright use this method, as well as people who would rather handle the bill themselves instead of having the bank pay for it. You will need to check with your assessor’s office to see when your property taxes are due, as it varies from state to state. You will receive a letter from the office saying when the money is due, and you pay it directly to them. People who know they will have the money every year will not find this method very hard, but you lose the security of the mortgage payment. With the mortgage payment, you know that the money is already there, and there is no worry. With this method, homeowners can look at their property disclosure and budget accordingly to pay their property tax on time.
Both of these methods have their own benefits depending on the person and their financial situation. It also depends on personal preference. If you would rather have a bank handle the money for the property taxes, or if you would rather handle the transaction yourself will be a factor in your decision. Either way, knowing the details of each method will help you decide which is best for you.