This is How to Understand Property Taxes Before You Buy
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The last thing you want to do is spend a ton of time and money purchasing a house without learning to understand property taxes and all of the other costs. Easily forgotten, many buyers forget to think about how their property taxes will change when they become homeowners. Instead of getting a surprisingly large and unexpected bill, learn and plan for your property taxes.
What's All This Money Going Toward?
Property taxes help your city and local government purchase things like redrawing traffic lanes, replacing traffic light bulbs, etc. Each area is
taxed differently and is determined by the value of your home. Because so little buyers understand this and also don’t understand how this can be such a big deal, most loans require an escrow account. If your realtor or lender don’t mention this, it could be because they don’t consider your loan high risk, but it is always a good idea to ask about it.
But, Why am I Paying Escrow?
Escrow accounts are essentially an insurance for the lender. They take on the burden of the taxes, and you pay them through monthly payments, instead of a yearly sum. So, escrow is actually a service to you, ensuring that what you owe is paid on time and without extra hassle.
Final Thoughts
Remember: Many -- if not
most -- homeowners make a home purchase for tax write-offs and other benefits. Property taxes are not a reason to keep you from purchasing your home, they're just one more thing to think about. Educate yourself by reading more beginner home buying tips from Homebidz.
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