Millions of homeowners dedicate their income to mortgage payments and property taxes every year. If you intend to purchase a home in the future, knowing how mortgage payments and property taxes work and intertwine can give you a better understanding of where your money goes.
Property tax is collected by your local government and allocated to provide resources for citizens such as state parks, schools, road improvement and more.
The property tax amount is calculated based on the local property tax rate and the value of your home.
Your mortgage insurance includes more than the raw amount of your home. In addition to the cost of the home borrowed, the amount also covers interest rates, mortgage insurance, homeowners insurance and the property tax for your district.
Your mortgage lender estimates the amount of property tax you’ll owe at the end of the year based on the property tax rate of your area and divides it by 12.
This amount is then added into your monthly mortgage payments. If you underpay, you’ll owe money to the government, but if you overpay, you’ll receive a tax refund.
Paying off your mortgage is a gradual process worthy of celebration. However, once the house is paid off, it’s essential to remember yearly property taxes are still due.
To stay on top of payments, you can contact your local government, and they can invoice the amount you owe each year. They may also offer you multiple payment options, as some require one lump sum per year, while others may offer quarterly payments.
Understanding your property tax options puts you ahead of the game and helps you better understand how your money helps to improve your community’s overall well-being.
Kimberly Kelly decided to get her real estate license when she moved to South Orange with her family and fell in love with the classic, period homes of the area. Having worked in the city for many years for LexisNexis, Kim understands the appeal of an easy commute to NYC. That’s why she specializes in towns along the Mid-Town Direct train line, offering welcoming communities, good schools, and space to grow.
Very active in her children’s school PTA, Kim knows firsthand how important a school system is to parents looking to make the move to the ‘burbs. She volunteers with fairs, fundraising, and other activities that bolster support for education. Kim also believes involvement in the greater community enriches us all and has sat on various boards & associations throughout the years.
Kim Kelly has lived many places throughout her life, from Pennsylvania to Oregon, but has found New Jersey to be the ideal place to raise her family and put down roots. She loves nothing more than helping others discover their special place as well. Kim’s extensive knowledge of the area, combined with her sense of community, offers clients a personalized guide to finding the right house - and town - to call home.
