Back Taxes From A Mortgage – Setup Escrow Account

When applying for a mortgage you will need to make many decisions. One of the most important is whether or not you will let the mortgage company use an escrow account to collect additional money from you. An escrow account is nothing more than a “middle man” between you and another party, such as your county. One of the main reasons to opt for an escrow built in to your mortgage is that you do not have to directly pay your property taxes. Instead, the money you pay into the escrow is held until your taxes are due. At that point, your mortgage company pays them and you do not have to do anything.

What if I do not opt for an escrow? In this case you should not expect your mortgage company to pay your property taxes. You should not expect this because it is not going to happen. Instead, you are now responsible for paying these taxes. If you think your mortgage company is going to do it, it is safe to say that your back taxes are going to grow month after month. Not only will you miss your payment, but you will also be faced with interest and penalties.

Make sure you check with your mortgage company from time to time to ensure that they are actually paying the proper taxes with the money that is put into escrow. There is a good chance that all of this information is outlined on the statements you receive every month. Mistakes can happen; you don’t want to become the next victim.

Simply put, if you do not do an escrow you are responsible for paying your own property taxes. If nobody pays, your or your lender, you can expect to receive a notice soon enough. Be sure to discuss all your escrow options and how this works before you sign on the dotted line.