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a few questions about taxes
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violet5
LIF Infant
Member since 7/11 54 total posts
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a few questions about taxes
I've read that your closing costs are typically 5-8% of the loan amount but I know taxes play a large role as well. DH and I are interested in a house that is easily in our price range but the taxes are very high. The owner said they took a huge jump this year and already took steps to grieve them. We can afford the taxes now, but the taxes seem a lot higher than other similar houses in the area. I also want to make sure we can afford the closing costs on a house with such high taxes before we think about putting in an offer...
1. If the owner is already in the process of grieving the taxes, how long should it usually take to find out if they will be changed?
2. What are the taxes based on? From the houses I've seen it looks like houses with more square footage, bigger property sizes, on the water, and in ground pools all have higher taxes than houses nearby without those. (And of course town by town they vary). If I'm looking at a house that is 2400 square feet, standard size property, not on the water, no pool, should the taxes be about the same as another house in the area with those stats? What else might make one house have higher taxes than a neighboring house? Are certain styles taxed higher? Basements? renovated?
3. How much should we expect taxes to go up each year? We want to make sure we can afford the house now but also 5 years from now, 10 years from now, 20 years from now...
4. I've read that you put 2-6 months of taxes in escrow at closing. That is a really big range especially when the taxes are really high. What determines this? Is higher in certain months? Certain times of the month? Can we "save" a lot of money by closing on our house in August as opposed to October, for example?
5. The taxes that go in escrow, are they applied to your taxes the first year or do they just sit there? If they sit there, is it until you sell the house?
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Posted 3/11/12 6:11 PM  |
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Erica
LIF Adult
Member since 5/05 11767 total posts
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Re: a few questions about taxes
Posted by DAS82411
1. If the owner is already in the process of grieving the taxes, how long should it usually take to find out if they will be changed?
In Huntington (and I think much of LI is like this), the grieving day is the thrid week of May and the decisions are made/mailed in August. Most of the time you have to appeal, so you are looking at September/October
3. How much should we expect taxes to go up each year? We want to make sure we can afford the house now but also 5 years from now, 10 years from now, 20 years from now...
Mine has gone up no more than $500 a year...that's about 5%
4. I've read that you put 2-6 months of taxes in escrow at closing. That is a really big range especially when the taxes are really high. What determines this? Is higher in certain months? Certain times of the month? Can we "save" a lot of money by closing on our house in August as opposed to October, for example?
Taxes are paid twice a year. If the sellers just paid their next 6 month installment, you have to pay them back for the months they prepaid.
5. The taxes that go in escrow, are they applied to your taxes the first year or do they just sit there? If they sit there, is it until you sell the house?
My lender wants us to have $2000 in escrow minimum. It builds up month by month and they pay the town and/or the insurance co. So they want my balance to be $7500 before they pay the town my taxes.
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| Posted 3/11/12 9:13 PM |
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Kelly9904
Mommy to 2 amazing little boys
Member since 5/05 9306 total posts
Name:
Kelly
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Re: a few questions about taxes
As far as grieving, it can take AWHILE. Took us over a year to hear as the town initially rejected it and then we went to small claims court where it was in the end lowered.
But our taxes did go down 1K per year.
Keep in mind another option is to not have your mortgage company pay your taxes and take the responsibility on yourself.
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| Posted 3/12/12 10:21 AM |
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violet5
LIF Infant
Member since 7/11 54 total posts
Name:
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Re: a few questions about taxes
Posted by Kelly9904
As far as grieving, it can take AWHILE. Took us over a year to hear as the town initially rejected it and then we went to small claims court where it was in the end lowered.
But our taxes did go down 1K per year.
Keep in mind another option is to not have your mortgage company pay your taxes and take the responsibility on yourself.
I didn't realize you could pay the taxes yourself. I was under the impression that you had to do the escrow. Are there any downsides to paying them yourself?
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| Posted 3/13/12 11:33 PM |
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-Lisa-
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Member since 5/05 6530 total posts
Name:
Lisa
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Re: a few questions about taxes
Posted by DAS82411
I didn't realize you could pay the taxes yourself. I was under the impression that you had to do the escrow. Are there any downsides to paying them yourself?
There is no downside, unless you forget to pay them. You just need to make sure you have the $$ available and pay on time.
Some banks/mortgage co's will require you to escrow or charge a higher rate, but there are plenty that don't. Also you can generally request to remove escrow after closing without affecting the rate.
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| Posted 3/14/12 11:29 AM |
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