Definition
Property taxes are taxes paid to local governments based on a home’s assessed value. They are used to fund public services like schools, police, and roads.
Understanding Property Taxes in Mortgages
Property taxes often appear during the mortgage process when estimating your monthly payments. Lenders typically include them in escrow accounts to ensure they're paid on time. In simple terms, these taxes help fund local services like schools and roads. Example: If your home's assessed value is $200,000 and the tax rate is 1%, you'd owe $2,000 annually. It's not just a one-time cost; property taxes are ongoing and can change yearly based on local budgets and valuations. Many think paying off a mortgage means no more taxes, but homeowners must continue paying property taxes even without a mortgage.
