Property Taxes - The property taxes for a new home purchase is determined by state or county assessors office and are based on the assessed value of the property.

If you disagree with your homes value, call the county assessor to re-check the value. Many times you can get your taxes lowered.

Although no one seems to like paying more taxes, the government and the United States Constittution prohibit you from paying taxes on top of other taxes. What this means is that what you pay in property taxes can be deducted from your personal income tax. Having more itemized deductions in some cases can actually move you into a lower tax bracket and lower the percentage that you pay in income taxes. Another tax benefit of home ownership.

You can pay your tax's by escrowing or by paying them in full at the end of the year. If you escrow your tax's are sent in monthly with your payment and held in an escrow account by your lender. The lender then pays the tax's for you at the end of the year. If you do not escrow you have the opportunity to invest your money all year and profit from it. You do not have that opportunity by escrowing.

If you escrow your taxes, you should always verify with the town tax collector that the lender has, indeed, paid the taxes when due. It is always the property owner's responsiblity to be sure that the taxes are paid, not the bank's. While it is rare that a bank will miss a tax payment, it has happened.

Assessment values and property taxes for one to three family house are determined by sale prices of similar, recently sold homes. New construction homes and specialty properties are valued base on the replacement costs. The assessment values of condominiums and cooperatives are estimated as if rental apartments. The estimated rental incomes of the units are used to determine the assessment values.

Property Taxes - Property Taxes
This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the buyer occupied the property.

Transfer Taxes and Recording Fees
This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.

Not only is every state different in property taxes, every county is different as well. It could even break down to what city that you live in. Your Loan Officer will be able to tell you the approximate property tax value is based on your home.

With many conventional, conforming loans you will be required to pay 1/12 of the annual taxes every month.
This money will be kept in an escrow account and will be used to pay the taxes as they come due.

If you do a refinance transaction and one of your property tax installments is due within 60 days of your closing, most lenders will require that the tax installment be paid before funding. You may also use any proceeds from the refinance to have it paid by escrow or the closing agent.

On all conforming loans that have a LTV (Loan to Value) of 80.01% or more, property tax escrows are required. This means that you need to have your property taxes included in your monthly payment. If you are at 80% LTV or below you have the option to not escrow for property taxes (not inlcude them in your payment), however you will usually have to pay a .25% fee to not escrow them.

Property taxes are determined by the value of the homes. As most homes have appreciated in value in recent years, most homeowners have seen their property taxes increase. Homeowners have the right to challenge the assessed values of their homes. They will need to provide sound reasons to support their arguments.

Every state is different when it comes to property taxes.

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