Property Taxes and Escrow Account: New Homebuyer has some questions...

Discussion in 'Archived Threads 2001-2004' started by Michael D. Bunting, Mar 18, 2003.

  1. Michael D. Bunting

    Michael D. Bunting Screenwriter

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    My wife and I just purchased a new home this past November - we love it [​IMG] We are both first-time homebuyers and I have a couple questions.

    Got a bill in the mail the other day that shows our 2003 Property Taxes. We owe: $681.86

    Do I need to pay this bill? I thought that my escrow account would handle Property taxes automatically each year when they become due?

    Or is the escrow account setup in case I fail to make my Property tax payments ???

    In my loan paperwork I found a sheet that breaks down my payments like this:

    My monthly mortgage payment is XXXX.XX , of which XXXX.XX will be for Principal and Interest and XXX.XX will go into my Escrow account.

    So, I'm kinda confused...I just tried calling my Title Company and they are already gone for the day (or nobody wants to answer the phone today?)

    Thanks for any help
     
  2. Joe Wong

    Joe Wong Second Unit

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    Michael,

    I believe the bank/mortgage provider handling your escrow account also handles the payment of property taxes.

    I bought my house in NJ last July, got my property tax notice in October, called the bank about whether I had to do anything, was told no, they would take care of it, and then got a delinquent property tax notice (for non-payment)a month later!

    The overdue interest on the tax bill was charged from my escrow, but then I complained and they refunded it to me.

    Hope that helps!

    Joe
     
  3. BrettB

    BrettB Producer

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    Congratulations! [​IMG]

    Who is the bill from?
     
  4. RobR

    RobR Second Unit

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    It's built into your mortgage payments if you arrange for it with the lender. Otherwise, you'd get separate property tax bills. If I were you, I'd call and find out exactly what was done.
     
  5. Craig

    Craig Second Unit

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    I get a copy of my tax bill every year also, but the lender pays it from escrow. You should have a breakdown somewhere in your paperwork about how much is being withheld for taxes.

    Escrow normally covers property taxes and homeowner insurance, it's not set up to be a backup fund in case you don't pay. If you're paying into escrow it's to cover something specific.
     
  6. LewB

    LewB Screenwriter

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    Sounds like your municipality is not aware that your taxes are being paid by a 3rd party (escrow account at bank). Give them a call and find out what needs to be done to get the tax bill sent directly to the bank.
     
  7. Patrick Larkin

    Patrick Larkin Screenwriter

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    Michael - I get the same thing from the city and school district. My mortgage company pays the bills but they won't pay it until I send in the bill. There is an address right on my mortgage payment slip that says to send in the tax bills upon receipt to an address listed.
     
  8. MikeAlletto

    MikeAlletto Cinematographer

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    Aren't property taxes due December 31st? Or does it vary by state? At least in texas its due end of the year.
     
  9. Michael D. Bunting

    Michael D. Bunting Screenwriter

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    Thanks for all the replies and great information fellas. I will be making a couple calls tomorrow morning to see what I can find out.

    It sounds like it will be taken care of with money out of our escrow - but I will find out for sure ASAP. I'm hoping this is the case...as it will make the $400.00 I dropped today on a 2nd TiVo DVR for our bedroom a little easier to fit into the budget [​IMG]

     
  10. ken thompson

    ken thompson Second Unit

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    One more thing you can look forward to every year is a notice of cancellation on your homeowners insurance. My mortgage company waits until the last minute to pay the insurance bill and I invariably get termination notices. Needless to say I freak out every time and have to do the whole song and dance with friggin bank to make sure they are on top of it. Hope this doesn't happen to you.
     
  11. Scott Merryfield

    Scott Merryfield Executive Producer

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    I hate escrow accounts because of all the potential screw-ups already mentioned in this thread, as well as the fact that the mortgage company is drawing interest on your money by making you pay your taxes and insurance well in advance of the due date. We obtained an escrow waiver as soon as we had enough equity in our first home, and I've never had one since on our primary residence. We just refinanced our vacation condo in Myrtle Beach, and I finally was able to obtain an escrow waiver for this property, too.

     
  12. DaveHo

    DaveHo Supporting Actor

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    If you are having money escrowed, the mortgage company will pay the taxes and home owners insurance. However, you do need to mail the bill to the mortgage company. In our case, the property & school tax bills did not get sent straight to the mortgage company, but the home owners insurance bill did. Be sure to make copies of everything you send them, and follow up with your local tax collector to be sure they are paid on time, etc. Also be sure to send them as soon as possbile. There is usually a discount if the tax bill is paid early.

    -Dave
     
  13. Patrick Sun

    Patrick Sun Moderator
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    It could be a YMMV situation. I get a bill for the property taxes (twice a year) and the insurance, but my escrow account pays off both bills with no input from me.
     
  14. Paul Bond

    Paul Bond Stunt Coordinator

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    Michael,

    Adding another thought to the process, since you bought your house last November, the previous owner should be responsible for 10/12ths of the annual taxes on the house. Unless the sales contract relieved him of that obligation.

    So that's another thing you might check, is to see if you owe all that or a smaller portion.
     
  15. Michael D. Bunting

    Michael D. Bunting Screenwriter

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    Paul

    I believe that these taxes are for 2003

    When we bought in November - the previous owner (builder) did in fact pay the taxes for Jan-Nov 2002 and I want to say that December property taxes was paid when we closed on the house.

    I'm calling the mortage company here in a couple minutes....
     
  16. Scott Merryfield

    Scott Merryfield Executive Producer

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  17. Michael D. Bunting

    Michael D. Bunting Screenwriter

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    Well.... good news!

    My Mortage company (USAA) said...."We receive the same information/statements that you do and everything is taken care of from your Escrow account."

    She also simply stated that I just keep these statements for my personal records.

    Thanks alot for all the help once again fellas!

    I had the check made out and the envelope all stamped and ready to drop in the mailbox today....you probably saved me quite the headache in trying to retrieve these funds from my County when down the road I realized I overpayed for 2003.

    [​IMG] [​IMG]
     
  18. Tim Markley

    Tim Markley Screenwriter

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    That's exactly how it's supposed to be done Michael. Like Scott said, if it's not being handled automatically by your mortgage company, then you need to call them and complain.
     
  19. nolesrule

    nolesrule Producer

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    That is usually taken care of during closing by reducing the buyer's closing costs and increasing the seller's closing costs. Then the buyer pays the full tax bill, but can only deduct the portion covering the time they owned the house.

    I'm having fun learning how all this stuff works. My wife and I bought a house just 6 weeks ago.
     
  20. Patrick Larkin

    Patrick Larkin Screenwriter

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    From my mortgage company FAQ:

    roperty tax bills or billing information is issued from the tax office handling property taxes in the area where your home is located (the tax office is also known as the "Taxing Authority"). This office will send you a bill prior to the tax payment due date. If you receive a tax bill marked "COPY" or "FOR YOUR INFORMATION," please keep this bill for your personal records. There is no need to send this bill to Countrywide, as we will receive your tax information directly from your Taxing Authority.

    Countrywide processes tax payments electronically via a tape-to-tape method for many of the larger tax authorities. With this method, you do not have to send us your tax bill. Your tax statement will indicate the billing method used by your tax authority.


    So, it appears it depends on your taxing authority whether you must send your bill in or not.
     

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