When buying a home, what are the real estate taxes that must be paid at closing?
Posted on March 29th, 2010 in Renting & Real Estate | 2 Comments »
Scarlett asked:
My husband and I are buying a home, and we were just looking at our Good Faith Estimate from the bank. It lists $1440 as "real estate taxes" that must be paid "outside of closing". We are closing on September 14th -- does this mean we have to save up for that, too, to pay for the 2009 tax year? And does this money get paid to the bank or directly to the IRS? Any clarification on this issue would be greatly appreciated!
Sarasota Florida Real Estate
My husband and I are buying a home, and we were just looking at our Good Faith Estimate from the bank. It lists $1440 as "real estate taxes" that must be paid "outside of closing". We are closing on September 14th -- does this mean we have to save up for that, too, to pay for the 2009 tax year? And does this money get paid to the bank or directly to the IRS? Any clarification on this issue would be greatly appreciated!
Sarasota Florida Real Estate
2 Responses
Chula Vista homes for sale
taxes vary wildly , but my 4 bedroom in a nice town is taxed at 1500 a year. you do not pay it seperately it is part of your mortgage bill
most people put the taxes in escrow. that means every month you pay part of the taxes as part of the mortgage
your loan for a 100k house is like 500 a month plus tax escrow (100) and PMI (50) and insurance (150)
they put all those together and send you a bill for 800 dollars every month
the bank totally ignores that extra 300 bucks when they figure your loan because that is not their money it is for escrow insurance and tax
so when you close the deal you find out the payment is 800 not 500 and the bank kind of suckered you .
because they have to pay it to the insurance company and the city tax office
Flathead Lake Real Estate
Most real estate taxes are paid quarterly. So you should have to give the Seller’s a credit for the final 16 days in September that they have already paid. You should also have to pay in escrow the real estate taxes for the months of October, November and December, or at least two of those months.
Thereafter, when you make a monthly payment, and your first monthly payment should be due on November 1st, a portion of that monthly payment will be escrowed for the payment of your next quarterly real estate tax bill, which will be for the months of January, February and March, and so on.
By the way property taxes are never paid to the IRS. You pay them to the lender, or the loan servicing agent, and they pay your municipality.
Good luck with your new home.