How do property taxes affect my monthly mortgage payments in Idaho?

by milan.glover , in category: Real Estate , 7 months ago

How do property taxes affect my monthly mortgage payments in Idaho?

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1 answer


by jeanie , 5 months ago


Property taxes in Idaho can have an impact on your monthly mortgage payments. When you purchase a home, your lender will typically set up an escrow account to collect a portion of your property taxes each month along with your mortgage payment. The collected funds are then used to pay your annual property tax bill.

Here's how property taxes can affect your monthly mortgage payments:

  1. Escrow Account: Your lender will estimate your annual property tax bill based on the assessed value of your property and the local tax rate. They will divide this amount by 12 to determine the monthly escrow payment you need to make along with your mortgage payment. This ensures that you have enough funds to cover your property taxes when they are due.
  2. Adjustments: Property tax rates can change over time, so your monthly escrow payment may also change. In Idaho, property tax assessments occur every five years, and tax rates can vary a**** counties and cities. If there is an increase in your property tax assessment or local tax rates, your monthly mortgage payment may increase to cover the difference.
  3. Reassessments: If your property is reassessed at a higher value, your property taxes may increase. This can lead to an increase in your monthly mortgage payment if your lender adjusts the escrow payment to cover the higher taxes.

It's important to note that property taxes are specific to the assessed value and location of your property. Idaho has a property tax assessment cap law, which limits the yearly increase in assessed property value to a maximum of 3% for owner-occupied primary residences and 5% for other properties. This helps provide some stability to property tax payments.

To get an accurate understanding of how property taxes will affect your monthly mortgage payments in Idaho, it's recommended to consult with a mortgage lender or use an online mortgage calculator that takes property taxes into account.