While I was paying my mortgage for the month, I noticed my escrow account shrunk... which means that my first installment of my property taxes was deducted from my account and paid for me by the bank.
So, I went to the County's website and looked at the bill. (since the bank takes care of it, I never see the bill for myself so I wanted to look at it.)
They value my property (structure and land) at $155,000.00
But I just paid $120,000.00 for it a few months ago. Can that be right? Can they charge me taxes on it for $155,000.00 or shouldn't they be charging me taxes on the 120,000.00 i paid (after all that was the assessment?)
If its really worth $155,000.00 and I only owe $117,500.00 that means I shouldn't pay PMI right?
The bank uses a formal appraisal to calculate the value of your home, not the one from the county.
ReplyDeleteAs far as the taxes, most counties allow you to protest the valuation if you feel it is too high. Check your county assessor's page for more information.
The assessment in my county is far below my market rate assessment. I was wondering the same thing when I bought but there is a difference. Btw when you have finished the remodel your market rate may go up but you have to pay for another assessment. Call your lender for more details. Probably not worth a new assessment until the market rebounds. As for taxes, if you want that assesment lowered to have lower taxes then you need to call your assessors office. Many times they use previous years. Considering the market they are probably WANTING to use prev. years to get more taxes. But good luck appealing if that's what you opt to do.
ReplyDeleteyou're an idiot. people pay more or less than a house is worth all the time. just because you paid a certain amount doesn't mean that that's how much your county thinks your house is worth. and property taxes are based on how much the county appraises the house at.
ReplyDeleteagain, the value of your house and what you paid are unrelated. you made an agreement with the bank to pay $120,000 for the house. until you pay 20% of what you owe them, you still need to pay PMI.
Assessments generally lag a little bit behind that is actually happening. In fact, official assessments are usually only done every few years. They generally have a period in which you can challenge your assessments - you will probably get a chance next year. But talk to the clerk at the county. Second - see what your pmi/sales contract says about dropping the pmi...and what you need to do. If you have a fha mortgage, you will have a hard time dropping it...but at the very least you will have to pay for a new appraisal. They may make you wait for up to 2 years before dropping pmi. But you stand a better chance if you initiate the proceedings. http://www.kiplinger.com/columns/ask/archive/2006/q0216.htm
ReplyDeleteI think with regards to PMI, you have to go by what the bank appraised the house at, not tax records. Tax values does not mean your house will sell for that or appraise for that amount.
ReplyDeleteWelcome to taxes. You can try to have the county reassess your condo but chances are that they won't. They can assess your property as whatever they like and tax you on it. I'm guessing you didn't have your property assessed but appraised which is a bit different. I think you are stuck paying taxes at the $155,000. Your PMI depends on the actual appraisal that was just done so I don't think that you'll be able to get that dropped.
ReplyDeleteI am not a real estate professional. Your tax assessed value is $155K so you pay tax on that. If I recall your posts regarding negotiating with the bank when you made your offer the bank accepted your offer based upon an appraisal of the property coming in at ~$10K less than the asking price. Its tax value is different than its market value; I think its apples & oranges to be honest.
ReplyDeletePMI is mortgage insurance, isn't it? You are insuring the bank that the mortgage will be paid in case die or something. If you don't put down 20% you have to pay PMI. Excelerate your mortgage payments directly toward principal and once you have 20% of the principal paid you can drop the PMI (I'm pretty sure that's how it works.)Suze Orman has talked about this so check out one of her books on the topic. Good Luck.
Dear Anon at 9:47 am, do you really need to log on to someone's blog and berate them and call them names? Sure, it's a public blog, but she's young woman with her first home. People aren't born with finance and tax knowledge, it's learned. She asked a question, the rest of us tried to provide helpful answers. Chill out.
ReplyDeleteAn appraisal and an assessment are two different things. The bank does an appraisal, the county does an assessment. They can pretty much do what they want and you can only challenege it by finding comparables with significantly lower assessments to prove you're being overtaxed. Even if you manage to get the assessed value changed, that still won't affect your mortgage. Your mortgage appraisal is based off comparable sales and actual market value plus the ability to actually sell the place. Even when the house appraises out higher, that doesn't mean getting rid of PMI is a hop skip and a jump. I recently purchased a property for $195k. I put 10% down, leaving me with a mortgage of $175,500. The assessed value dropped for 2010 tax year from around $175k down to $155k. The bank appraised the property at $230k. Based on Appraised value, I technically have about 27% equity. I still have to pay PMI because the bank goes off down payment OR appraised value, whichever is lesser. I am told that in about a year I can have the place re-appraised and only the appraised value will apply and I will be able to get the PMI dropped. I am assuming this is to cover their butts against falling home prices. Sounds illegal. It's all just a big load of horse manure if you ask me. Anything to steal a buck from my pocket!
ReplyDelete