Generally, every homeowner receives a notice of property tax bill even if the owner has an escrow. However, if this is the first time you received it in years, then there can be an error with your property tax this time. So, contact your escrow agent with a copy of the bill immediately.
You have escrowed your property tax with your mortgage. But suddenly you have received a property tax bill and not sure what to do.
Don’t panic. Because in this post I am going to simply explain why did I get a property tax bill if I have escrow? How to find out if your property tax bill is paid or not, what to do if your mortgage company failed to pay property taxes, and all the related queries. So, stick here.
Why Did I Get A Property Tax Bill If I Have Escrow?
Normally, every homeowner receives a notice of the property tax bill for their record. Doesn’t matter if you have escrowed your property tax or not. However, there can be issues sometimes.
When you escrow your property tax with the mortgage, you partially pay your property tax with your mortgage payment every month. Your lender keeps the portion of your property tax in an escrowed account. Then when the time comes your mortgage provider pays the property tax for you.
In most states at the time of the tax payment, your mortgage lender receives an electronic copy of the tax bill and you receive a notice of the property tax bill. That might be the reason you have received a property tax bill.
In case you have paid your property tax this way for years and it is the first time you receive a tax bill then there is something wrong and you should take steps. There can be two reasons behind this. They are
- Firstly, this can be a simple error. So, it’s better to contact your lender and ask the reason.
- Secondly, your mortgage lender failed to pay your property tax. If this is the case then seek legal help.
No matter what the reason is you should take steps as soon as possible. Because if your property tax remains unpaid then the unpaid amount will become a Tax Lien on your property. So, you might end up paying a hefty fine or in the worst case, your home might be taken over.
Also, find out whether jail is a possibility in case of unpaid tax.
In case you are a new property owner how do you if your lender pay your property tax or not?
Does My Lender Pay My Property Taxes?
Actually, it depends on whether you have escrowed your tax with your mortgage or not. If you escrow your tax with your mortgage then your lender will pay your taxes until you fully pay off your mortgage. Otherwise, your lender won’t pay your property tax.
When you take a mortgage there is an option of adding your property tax and homeowners insurance with your mortgage payment. If you choose this then you will pay a portion of your property tax with each mortgage payment and it will be kept in a restricted account. When the time comes it will e paid by your lender.
On the other hand, if you don’t escrow your property tax with a mortgage or your mortgage lender do not have such an option then you have to pay your property tax yourself.
However, if you are not sure if you have escrowed your property tax or not then look at your mortgage agreement or mortgage statement and find out whether there is an escrow account or not.
But when does escrow pay property taxes?
When does Escrow Pay Property Taxes?
Property tax is collected by the state government and local authorities. So, different states have different dates for paying property tax. However, in most US states property tax is paid in two installments. Your escrow pays the property tax before the due date in your state.
If you have escrowed your tax with the mortgage, then your lender holds your property tax for you in an escrow account.
So, if you have an escrow and paid your mortgage regularly, you don’t have to worry about property tax. Your escrow service company will pay the property tax when before the due date automatically/
Now let’s learn how to find out if my mortgage company paid my taxes.
How Do I Know If My Mortgage Company Paid My Taxes?
First, check if you have an escrow or not in your mortgage statement. In case, you have one then look at the escrow balance and mortgage statement online to find out if your mortgage company paid your taxes or not.
If you have escrowed your tax with the mortgage then your lender must pay the property tax. In case you want to know whether your mortgage lender is paying the property tax or not, follow the below steps
- According to federal law, your lender must send you an escrow review statement. Check it out to find out if your property tax is paid or not.
- You can also look at your mortgage statement online to find out whether your property tax is paid or not.
- If none of the above works for you then look at your town property tax record, select the year and find out if your property tax is paid by your mortgage company or not.
Follow the above procedure to find out if your mortgage lender pays your property tax or not. But what if your mortgage company failed to pay property taxes?
What to Do If your Mortgage Company Failed to Pay Property Taxes?
In case your mortgage company failed to pay property taxes, then firstly send your service provider a notice of error. If they don’t resolve the issue then you must consult with a lawyer and report to the Tax authority ASAP.
When you have escrowed your property tax, then by federal law, your mortgage company must pay the tax on your behalf.
However, sometimes errors happen and your mortgage company doesn’t pay your property tax bill. In those situations, your first step should be sending a notice of error to your mortgage lender.
Your mortgage provider should solve your issue once they receive your notice of error. But if they do not solve it then you should lawyer up and contact the tax authorities as soon as possible.
In situations like that, a housing counselor can provide the best possible advice. So, you should consult one.
Keep one thing in mind, your property tax must be paid whether your issue is solved or not. So, if the issue is not solved before the tax due date. Then pay the property tax yourself.
Also, check our article on box D control number in W2.
I hope this simple explanation of why did I get a property tax bill if I have escrow is helpful. Let me know your opinion in the comments.
Lastly, if you face any property tax-related issues then consult with a housing counselor as soon as possible.
That’s it for today. Have a great Day!