# Mortgage property tax balance



## nathan79 (Feb 21, 2011)

When I got my mortgage 10 years ago the property taxes were included in the monthly payments. I have no memory of whether I agreed to this; it was my first mortgage and at the time I didn't know anything about personal finance or owning property.

I received my property tax notice from the city a few days ago. I was just checking my mortgage account online and I noticed they have deducted $1273.55, for taxes which are due on July 2nd, 2013. However, according to the city my taxes are only $920. So my first question is, can I get some kind of refund from the mortgage company? Second question, is possible to change my agreement with the mortgage company and pay my own taxes rather than having it deducted? It occurred to me that I could be earning interest on that $1273.

Has anyone had success in negotiating with their mortgage company to pay their own taxes?


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## NorthKC (Apr 1, 2013)

The mortgage company often deduct a little more than what's expected to account for any abnormal increase in property taxes.

Yes, you can certainly ask the mortgage company to stop them from paying taxes on your behalf. You'll have to fill out some forms but for the most part, quick and easy to do. One thing to keep in mind, make sure you set aside some money for the property taxes! You may want to do PAD with the city hall on a monthly basis if you have trouble saving up for them.


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## Cal (Jun 17, 2009)

I had a previous owner of a property I owned get sent a bill for property taxes payable after a re-assessment was done. So as recommended above, it can be good to set a little aside if cash flow is tight.


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## sprocket1200 (Aug 21, 2009)

its your taxes, not theirs. this is a non-issue, just tell them to stop and return your cash!!

then immediately start fighting the municipality for the over taxation they are doing!!

we got our tax bill reduced by 20% without question. just go thru the process. it is brutal that they have so much revenue based on this!!!!



nathan79 said:


> When I got my mortgage 10 years ago the property taxes were included in the monthly payments. I have no memory of whether I agreed to this; it was my first mortgage and at the time I didn't know anything about personal finance or owning property.
> 
> I received my property tax notice from the city a few days ago. I was just checking my mortgage account online and I noticed they have deducted $1273.55, for taxes which are due on July 2nd, 2013. However, according to the city my taxes are only $920. So my first question is, can I get some kind of refund from the mortgage company? Second question, is possible to change my agreement with the mortgage company and pay my own taxes rather than having it deducted? It occurred to me that I could be earning interest on that $1273.
> 
> Has anyone had success in negotiating with their mortgage company to pay their own taxes?


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## MRT (Apr 8, 2013)

please correct me if I'm wrong, as I've been out of the biz for a couple of years, but...

Typically, mortgage lenders adjust the tax portion of your payment whenever a new tax bill is sent to them. Make sure your lender has your most current tax notice; otherwise, they may simply increase the tax portion via an estimate of the anticipated increase for the following tax year (they don't contact the municipality for all of their clients to obtain exact info - waste of time and money).

Remember, the tax portion the lender collects accumulates to pay future taxes owed, so that there is not a shortfall in your tax account. Thus, this year's tax notice may not mesh with what they start collecting in the latter part of the year. E.g. your 2013 Final Taxes are due long before the end of 2013, so what is being collected in the latter part of the year is actually to pay the 2014 Interim Tax notice, which presumably will be higher than that of 2013.

AFAIK, unless contractual obligations exist (and sometimes they do), it is up to you if you want your lender to collect and remit municipal taxes on your behalf. It may be offered as a 'service' to clients (and is indeed helpful to those who fail to budget properly), but in reality it is also self-serving, as outstanding property taxes take priority over any mortgage in the event of default/power of sale/etc. So it is very much in the interest of the banks to make sure their clients pay their property taxes 

Also, taxes held in a tax acct should accumulate interest on your behalf (at some token negligible rate, of course)


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