Paying property taxes is a necessary part of purchasing your new home. If you are a first-time home buyer this may be a confusing part of the process. Your property taxes will be a percentage of the purchase price of your home and will remain as such for the entire time you own your home. As your local Ventura County realtor, our team is happy to advise you on the best way to approach handling your property taxes.
Property taxes can be part of your mortgage payment as part of what is called an impound account. You may also have the option to opt out of these impound accounts. Depending on the type of loan that you select and/or qualify for will dictate whether or not this step is necessary. Whether or not you pay your property taxes as part of your monthly mortgage payment you will always be responsible for the payment due. An FHA loan for example requires all borrowers to pay their property taxes are part of their monthly mortgage payment. This helps to protect the lender in the event of a foreclosure.
Sometimes you will have the option to refinance your existing loan to opt out of impounds in the future. This option usually occurs when a borrower puts less than 20% down and has then acquired or paid into at least 20% principal of the loan over the first two years. At that point the borrower would be able to refinance the loan and opt out of paying for their property taxes as part of their monthly mortgage. However, many borrowers decide over time that it is easier and less stressful to not have to worry about a large lump sum due twice per year. If you have any questions about how to handle your property taxes, as your local Ventura County realtor, our team is here to support you.