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We bought a new construction house in May 2015, and the mortgage payment assumed property taxes of the sales price. In October, we paid a property tax on the land value. After the new reassessments in Wake County, we didn't get anything new, and our tax on the county website right now still lists our land value.
Just this week, Well Fargo just refunded us a very large check from our escrow. I don't like paying large sums unexpected. When is Wake County going to charge us our "regular" property tax based on our sales price? The expected property tax for the fall of 2016 lists the "regular" amount. But what about the year in 2015 from May, when we needed to pay more than just the land? I believe I should just deposit this large refund escrow check into my mortgage account? Even after the refund, our escrow account will have the correct amount of money for our "regular" property tax payment in the fall.
"Property is appraised based on whatever improvements are present on January 1 of a given year. If your home was under construction on January 1, it will be given an adjusted value based on how much of the work was completed. This value is based on an estimate of what the home may be worth when finished."
Same thing happened to me. I don't know what your lender is doing so far as required monthly escrow payments are concerned but I would make payments into escrow based on what you know taxes will be next year or you will be asked to make a larger payment going forward until escrow is adjusted or they'll want a check to bring the account up to snuff.
Same thing happened to me. I don't know what your lender is doing so far as required monthly escrow payments are concerned but I would make payments into escrow based on what you know taxes will be next year or you will be asked to make a larger payment going forward until escrow is adjusted or they'll want a check to bring the account up to snuff.
Right, WF is still basing escrow on what the tax payment will be later this year. But I have no information on what I'm supposed to pay from May 2015 closing to the end of the year. Guess I will put some of this refund check back to my savings account, I hate having to cough up a huge amount unexpectedly.
Right, WF is still basing escrow on what the tax payment will be later this year. But I have no information on what I'm supposed to pay from May 2015 closing to the end of the year. Guess I will put some of this refund check back to my savings account, I hate having to cough up a huge amount unexpectedly.
I closed the end of March 2014. Durham only taxed me for the entire year of 2014 based on the taxes on the land value only. I called the tax office to ask about this and was told you get the first year or whatever portion is left after closing at the land value rate. I know this is not the case in some other areas that I lived. I got a nice escrow refund check from my lender which I promptly put on the mortgage. There is nothing due don't concern yourself with it.
Your tax bill is based on the value of your home and improvements on January 1.
The county doesn’t have to come up with a new value for January 1, 2016 until July 1, 2016 when they issue the 2016 tax bill. Often times they won’t do it until sometime in the spring.
There is no additional tax bill due from May. The 2015 bill is based on the January 1, 2015 land value if that is all that is there. The 2016 bill will be based on the completed home and lot.
Most lenders do what Wells did. They escrow based on the completed value of the home even though the bill will be based on the vacant lot. So, the refund is truly unneeded money that Wells collected.
The "gotcha" is the monthly tax escrow payment. Assuming that the monthly tax escrow was estimated correctly, that is the amount you want to continue escrowing. The 2016 tax bill will be based on the completed home and will need an amount sufficient to pay the full completed value tax bill.
You don’t want Wells to lower the tax escrow to 1/12 of the land value tax bill! If they do that you will face a "double gotcha". In 2016, Wells will pay the completed value tax bill. At the next annual escrow analysis you will face a whooping shortfall. You will be short for 2016, (1) approximately the amount of your refund and (2) Wells will increase the next year escrow by the amount of the refund so they will have enough money to pay the next year’s bill. The following year the escrow should drop back to the normal 1/12 of the annual tax bill.
If Wells does lower the tax escrow, you can either make voluntary payments into the escrow account or ask them to adjust it to the original amount.
Most lenders don’t seem to have the capability to handle the new construction scenario.
(This reply assumes that someone made a reasonable estimate of the completed value tax bill.)
Your tax bill is based on the value of your home and improvements on January 1.
The county doesn’t have to come up with a new value for January 1, 2016 until July 1, 2016 when they issue the 2016 tax bill. Often times they won’t do it until sometime in the spring.
One slight correction. The new tax value will be set as of 1/1/16. The tax rate will be determined in the spring, and will become the official new rate as of 7/1/16. Tax bills are generally sent out in September, and 2016 taxes are overdue somewhere around 1/5/17.
Your tax bill is based on the value of your home and improvements on January 1.
The county doesn’t have to come up with a new value for January 1, 2016 until July 1, 2016 when they issue the 2016 tax bill. Often times they won’t do it until sometime in the spring.
There is no additional tax bill due from May. The 2015 bill is based on the January 1, 2015 land value if that is all that is there. The 2016 bill will be based on the completed home and lot.
Most lenders do what Wells did. They escrow based on the completed value of the home even though the bill will be based on the vacant lot. So, the refund is truly unneeded money that Wells collected.
The "gotcha" is the monthly tax escrow payment. Assuming that the monthly tax escrow was estimated correctly, that is the amount you want to continue escrowing. The 2016 tax bill will be based on the completed home and will need an amount sufficient to pay the full completed value tax bill.
You don’t want Wells to lower the tax escrow to 1/12 of the land value tax bill! If they do that you will face a "double gotcha". In 2016, Wells will pay the completed value tax bill. At the next annual escrow analysis you will face a whooping shortfall. You will be short for 2016, (1) approximately the amount of your refund and (2) Wells will increase the next year escrow by the amount of the refund so they will have enough money to pay the next year’s bill. The following year the escrow should drop back to the normal 1/12 of the annual tax bill.
If Wells does lower the tax escrow, you can either make voluntary payments into the escrow account or ask them to adjust it to the original amount.
Most lenders don’t seem to have the capability to handle the new construction scenario.
(This reply assumes that someone made a reasonable estimate of the completed value tax bill.)
Thanks for this great post! So hopefully this refund, I can just throw at the mortgage and not have to worry about "pulling" this money out again later in the year!
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