If you own or occupy property, you have to pay taxes on it. However, what you pay will depend on a huge variety of factors, not in the least where in the country you live. One of the key elements of everything to know about property tax collecting, is that most local government funding comes from property taxes. Additionally, what you pay usually depends on the value of your home. This can be incredibly confusing, not in the least because some people pay their own property taxes, whereas others pay it as part of their mortgage.
Everything to Know About Property Tax Collecting – How Much Do You Have to Pay
You need to know how much you have to pay in property taxes in order to be able to establish your budget. The best way to do this is to speak to your local tax assessor, who will tell you what the property tax rules for your geographical area are. Usually, the tax rate is a percentage of the value of your property. You can then decide to pay this yearly, or to put 1/12 of that amount per month in escrow. However, the percentage is an estimate, because there may be other fees associated as well.
Everything to Know About Property Tax Collecting – How to Pay
Now that you know approximately how much you have to pay, you need to know how to pay it. It is possible that you pay an escrow or impound account as part of your mortgage. If so, then your monthly mortgage payments include insurance premiums and tax payments as well. All payments are then held in escrow and are used to pay for insurance and tax at the end of the year. This is easy, because you pay a single amount and everything is then taken care of.
If you have paid off your mortgage, however, you will need to pay your property taxes yourself. This has to be done directly to the government office that deals with property taxes where you live. Usually, this is the county tax collector.
Why Do Mortgage Companies Help?
In most countries, mortgage companies do not have any involvement with insurance or taxes, but they do in this country. The reason is that tax liens take precedence over lender liens. What this means is that it is in the lender’s interest to make sure your taxes are paid because should you default on your mortgage payments, the government will own your home instead of the lender. Not just that, when you sign your mortgage agreement, you are likely to see a “tax service fee”. That is the fee that the lender charges for calculating your property taxes and for maintaining the escrow account for you. This fee is an added bonus to them, and ensures they can hire more staff as well. If you feel confident about doing all this yourself, you may be able to negotiate that with your lender, but it is likely that their tax service is included in a mandatory way.
