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Property Taxes 101: Understanding Your Property Tax Payments

Whether you’re a first-time homeowner or just now beginning your search, it’s important to make sure you fully understand the ins and outs of your property tax payments and what happens if you miss your annual property tax deadline.  Bills are mailed by the county towards the end of each year.

For starters, there are two primary methods of paying your property taxes.

  1. The first method is called an escrow account, which is typically a bank-managed fund that will add a cost to your monthly mortgage payment.  Your mortgage company will save it on your behalf and make the payment on your behalf when it is due.
  2. The second method involves managing the payment yourself.  This method typically requires you to save money in advance in preparation of payment of the bill.

But if you don't have an escrow account, how easy is it to save money for your annual payment, and what happens if you end up paying your taxes after the deadline?

1) Fees can add up quickly, so get on top of them fast

For those who don’t have your bank managing an escrow account, your property tax payments are due annually by February 1st — that’s the first deadline to pay attention to.

As soon as your property tax payment is late on February 1st, the taxing authority will charge 7 percent in interest and penalties. In most counties within the state of Texas, that rate increases by 2 percent per month until July 1st, when the taxing authority charges an additional collection fee of 20 percent.

 If your property taxes are still delinquent on July 1st, you will have accrued 38 percent in interest, penalties, and fees on your original property tax bill. The penalties don’t stop on July 1st, as the rate will continue to increase each month.  By the end of the year, the total interest, penalties, and fees will be 44 percent and that’s just in the first year alone.

Thankfully, retaining a sense of financial independence while also avoiding penalties is fairly simple if you apply for a loan with a well-respected property tax lending company.

2) Getting an estimate on your loan is easier than you think

Many property tax loan specialists (Propel Tax included), have made it easier than ever to qualify for a property tax loan. To qualify, the information you’ll need to provide your property tax loan office is minimal. The information may include:

  • First and Last Name of Property Owner(s)
  • Property Address
  • Mailing Address
  • Contact Information (phone number, email, etc.)
  • Mortgage Company information (if any)
  • Date of Birth

3) Application costs are nonexistent

Property tax loan specialists (including Propel Tax) design monthly payment plans to meet your budget needs, and eliminate out-of-pocket, up-front costs to borrowers. All costs therein are financed so that you pay nothing. Additionally, our closing fees are low, and there are no application fees of any kind. 

We understand that no two homeowners are alike, especially within the state of Texas. With that in mind, we take time to consider the entirety of your application, and customize a payment plan accordingly. For those in a homestead, if you decide to go in a different direction, you’ll have three days to cancel your application and rescind your documents.

Property tax loans don’t need to be complicated.  They just need to get the job done and we can help with that. Have questions on property tax penalty rates within your county? Check out our chart of typical property tax penalties based on an example bill of $10,000 and see how Propel Tax can help.

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