In most cases this is a positive. It further solidifies the value of your property and validates any appreciation you may have gained over the past few years. However, you will also pay more taxes.
If your taxes are in escrow with your lender, they will not receive notice of the increased tax bill until the end of the year when taxes are due. The lender must pay your taxes, however, there will be a major shortfall in your escrow account and that portion of your house payment will as much as triple for the next twelve months to compensate.
Your options:
Go to your county web site and find your current assessed property value, your previous year’s property tax bill and your property tax rate. Multiply your tax rate by the newly assessed value of your property to find your next years amount of property tax. Now subtract your previous year’s tax amount from this figure to see the difference in property taxes you will pay. Divide this figure by 12 to obtain the monthly difference.
At this point you have two choices.
1. You can either wait until next year and your escrow payments will as much as triple to cover the shortfall, or
2. You can begin adding the new monthly amount as additional escrow to your current mortgage payment to minimize the payment shock next year. If you pay by check, I recommend writing a separate check with “additional escrow” written in the memo block and keep copies of everything.
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For more information and the answers to your questions, feel free to call me anytime at 919-851-0999.
