subject: Property Tax- Know its Importance to the Home Buying Process [print this page] Author: Flynna Sarah Author: Flynna Sarah
When you have plans of purchasing a property, you will surely look in property listings and other sources that you can think of. Searching for prospects is easier if you know exactly what you want in your house. But the saga will not end there, before making your final decision there are some costs that must be considered. True enough, becoming a home buyer will need vigilance and discernment on every move you make as well as every penny you shell out on the deal. These home buying expenses cover the following things like insurance, closing and property taxes. Such taxes must be on top of the priority if you want to end up with a good one. You can not avoid the fact that they are already part of every real estate deal and thus never attempt to get away from them. When you apply for a home mortgage, items such as property tax, insurance charges and other costs are already settled. These taxes must be paid off during the first quarter of the home purchase procedure. Actually there are sellers who should these taxes from the start of the procedure. However, when you finally reach the closing, the buyer is reliable for paying all of them. All home buyers are required to pay these taxes as mandated by law. In some cases, the lender will persuade you to open an account that will hold the two months deposit before you end the deal. True enough that the Escrow account is used to settle the property taxes and hazard insurance. If you are trying to understand the importance of this Escrow account, simply think of this way, it is just like asking why you can not settle your own property taxes. On the other hand, people who opened for an Escrow account and applied for mortgage are said to default on loan dues. Tax defaults are impossible to occur when the year ends for borrowers who do not have enough resources to settle their yearly tax dues. Payments done every month are deposited into the Escrow account to secure that you are paying your taxes on time. The Escrow account is a savings kind of account for particular reasons like paying your homeowners insurance premiums and real property taxes. But you must have enough resources to be deposited to the account to give assurance that you are a responsible payer. When the time comes that you will apply for a loan while looking for a possible property, lending companies or banks can pay the taxes on your behalf if you have an Escrow account. Opening an Escrow account to pay the property taxes is advantageous on your side as a home buyer. However, like majority of home buyers, it will still depend on their choice if they want to settle their taxes on their own or end up in money market account. Alternatively, if you want to be secured that you will not be able to fail on paying your taxes, it is ideal to open an Escrow account! The loan officer will definitely like this since he will have less worries on dealing with overdue accounts. About the Author:
