Escrow Thursday: How Are Taxes Paid

How Are Taxes Paid?

The lending institution where you have your loan maintains the escrow account for your payments on your loan. These payments include taxes and hazard insurance. When taxes are due, usually twice a year, the money is taken out of the escrow account and disbursed to the county tax office where you live. If there is not enough money in the account you can expect to get a bill from the lender for the amount owing in taxes. If you do not pay it you can be charged interest and penalties for the balance owing. Your lender will then recalculate your payments based on the increase of taxes and or insurance payments. You will then have your monthly payments adjusted to reflect the increase.If your property taxes or insurance payment go down, your monthly payments to your mortgage account will also go down.

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