When obtaining a home loan, you’ll receive two important documents from your lender: a loan estimate and a closing disclosure. On the surface, these documents are very similar, but they both serve different purposes. Here’s what you need to know about the differences between these two forms and what each means for you:
How are property taxes paid?
Property taxes may be one of the less anticipated parts of homeownership, but you should be prepared for them nonetheless. Property taxes are collected by your local government and used to benefit the community in which you live. Think about it as your contribution to help pay for services and projects like public safety, roads, and parks.
You have a few options on how to pay your property taxes:
Property taxes can be paid directly to your local tax office
One of the main options for paying your property taxes is paying them directly at your local tax office. These payments are sent to you via tickets that you can break off and send in to your tax office via mail with your check or money order. These payments are installments so you don’t have to pay the whole amount at once.
Depending on where you live, you can also pay:
- By telephone via debit or credit card
- Online via debit or credit card
- Online via eCheck
Property taxes can be paid through monthly mortgage payments
Alternatively, you can pay your property taxes through your monthly mortgage payments.
This method works by paying a little more in your mortgage payments each month. Then part of it is transferred into an escrow account that is used to pay your property taxes when they come due. This method is helpful to those homeowners who don’t wish to pay the sum themselves when taxes come due.
Even when you pay property taxes this way, you will still get a tax bill from your city. This is simply for your records and the bill has already been taken care of through escrow. If you have questions, contact your mortgage company.
Tip: before purchasing a home, check for unpaid property taxes
At SmartMortgage, we want to make sure that all is in order before you purchase a home. That is why we always recommend that you check for any unpaid property taxes or liens on the home you plan to purchase. When it comes to unpaid property taxes on a home, work closely with your realtor to determine who pays them and when. Have the home sale contract clearly state these requirements that each party pay their share of the tax.