I’ve been getting several calls over the past week from clients curious whether or not their taxes were impounded in their loan because they just received a tax bill from the county assessors office. I thought that it would be a good idea to send out an email breaking down how it all works. 🙂
Here’s what you need to know:
Your first installment of your property taxes are due on November 1st and become delinquent after December 10th. The second installment is due February 1st and becomes delinquent after April 10th. The annual tax bills are mailed at the beginning of October of each year, once a year. If your bill contains the notation “COPY – SEE ENCLOSED INSERT,” this means that a bank, or mortgage company has requested the tax bill on your behalf. If you are unsure if a lender or other paying agent is paying your bill, you can contact your lender to confirm.
You will also note on your mortgage statement the breakdown each and every month. You should see a portion on your bill that states ‘escrow payment’ and ‘escrow balance’. The escrow payment is what you make each month along with your principle and interest payment. The escrow balance is the amount that your servicing company has to pay your bill when it becomes due. Every time you make a monthly mortgage payment you’ll notice that the escrow balances gets larger and larger. Typically the mortgage companies pay the taxes after you make your December’s payment. So you may notice the escrow balance on December’s bill will be very high and then you can determine by January’s bill, that the taxes were paid, because the balance will seem much, much lower. The same goes for April.
Keep in mind that if you don’t have an escrow/impound account, you are responsible for paying your taxes on your own, so that bill, is a bill you’ll need to pay. 🙂
I always encourage you to contact me, I’m a great resource for all of your lending questions regarding your current mortgage or future mortgages. I hope that you find this information helpful!