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Old 02-14-2008, 05:30 AM
 
86 posts, read 402,047 times
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Were getting ready to close on our home next week and I noticed
on the final papers it looks like we pay the whole year of taxes upfront??
Is this how it works in Tx. Every state we have lived in (5 now) you
pay property taxes every 6 months. Im confused. Can anyone shed some
light on this subject.

Thanks again, this site is a wonderful resource for new TX residents.
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Old 02-14-2008, 05:57 AM
 
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By law, property taxes are due by Feb. of the following year.

That your paperwork states that the full tax payment for the current year is due at closing must be part of the escrow agreement. When I had a mortgage + escrow in Dallas, the lender required a few months of reserves (pre-paid items) but not a whole year...
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Old 02-14-2008, 08:20 AM
 
Location: Dallas/Fort Worth, Texas
4,207 posts, read 15,255,953 times
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Taxes are paid here yearly only. The invoices start going out the beginning of October and the payment is due by January 31. If not, a 7% penalty is applied.

You shouldn't be escrowing a whole year. The lender will collect 3 months of taxes and 2 months of insurance to start the escrow account. You also will be receiving credit from the seller for January 1 until whatever day you close. The only item that you pay a whole year for upfront is your home insurance. It will always be due on the anniversary of your purchase.

Naima
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Old 02-14-2008, 09:49 AM
 
86 posts, read 402,047 times
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Thanks so much for the information.
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Old 02-14-2008, 12:12 PM
 
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I got confused by our closing papers as well. They listed the full year of property taxes being due at closing, but on a separate line, there was a credit from the sellers for the portion of the year they owned it.

We would have a hard time planning for a whole year's worth of taxes, so we escrow.
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Old 02-14-2008, 12:43 PM
 
Location: Dallas/Fort Worth, Texas
4,207 posts, read 15,255,953 times
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Quote:
Originally Posted by CallMeLaura View Post
I got confused by our closing papers as well. They listed the full year of property taxes being due at closing, but on a separate line, there was a credit from the sellers for the portion of the year they owned it.

We would have a hard time planning for a whole year's worth of taxes, so we escrow.
It's a smart move to escrow because I have seen too many people get in trouble becaue of lack of discipline to save money for that big tax bill and they end up being foreclosed on...
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Old 02-14-2008, 01:00 PM
 
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Quote:
Originally Posted by nsumner View Post
It's a smart move to escrow because I have seen too many people get in trouble becaue of lack of discipline to save money for that big tax bill and they end up being foreclosed on...
Really? Just a few days ago the DMN quoted the tax assessor in Dallas that they hardly ever foreclose because of delinquent taxes. This was in an article about predatory property tax lenders.

"Mr. Sauls didn't realize Dallas County taxing entities generally don't foreclose on a homestead and sell it for past-due taxes. David Childs, the county's tax assessor-collector, called such instances "extremely rare."

Dallas residents find property tax loans a fast track to foreclosure | Dallas Morning News | News for Dallas, Texas | Latest News (http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/021108dnmettaxliens.3c60ae6.html - broken link)
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Old 02-14-2008, 01:09 PM
 
Location: Dallas/Fort Worth, Texas
4,207 posts, read 15,255,953 times
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That may be true for Dallas county, however, when people find themselves in a bind and have to pay their taxes by January 31, they usually neglect their mortgage payment to catch up with the taxes, and it starts a trend where that affects their credit and they can't refinance... etc. etc.

I always recommend to clients to escrow.
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Old 02-14-2008, 02:59 PM
 
415 posts, read 1,718,428 times
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Quote:
Originally Posted by nsumner View Post
It's a smart move to escrow because I have seen too many people get in trouble becaue of lack of discipline to save money for that big tax bill and they end up being foreclosed on...
Yeah, don't know why we can't budget for that, but it's no problem to pay the higher amount each month. Actually, I don't save anything if it's not automatically taken out of my check, either. lol, maybe I should start direct depositing my check straight into savings, and move out expenses as I need them...

HOA is another one they'll foreclose for. Over 100 in our HOA last year, I heard. Wish we could pay that one monthly, too!
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Old 02-14-2008, 03:04 PM
 
Location: WA
5,641 posts, read 24,953,484 times
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Quote:
Originally Posted by galore View Post
Really? Just a few days ago the DMN quoted the tax assessor in Dallas that they hardly ever foreclose because of delinquent taxes. This was in an article about predatory property tax lenders.

"Mr. Sauls didn't realize Dallas County taxing entities generally don't foreclose on a homestead and sell it for past-due taxes. David Childs, the county's tax assessor-collector, called such instances "extremely rare."

Dallas residents find property tax loans a fast track to foreclosure | Dallas Morning News | News for Dallas, Texas | Latest News (http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/021108dnmettaxliens.3c60ae6.html - broken link)
That’s because they sell the tax liens to large legal firms that specialize in tax collections and foreclosures. I had serious problems with DCAD and found their practices downright immoral.

I was billed for taxes owed by the previous owner that resulted in a ten-year lawsuit where a senile judge ruled for the county. Attorneys and title insurance companies all called the practice outrageous and unique in the country.

Don't believe every lie and cover-up printed in the DMN.
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