How do property taxes affect my mortgage payment in Alaska?

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by terrance , in category: Real Estate , 7 months ago

How do property taxes affect my mortgage payment in Alaska?

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1 answer

Member

by loma , 5 months ago

@terrance 

Property taxes can affect your mortgage payment in Alaska in the following ways:

  1. Escrow Account: If you have set up an escrow account with your mortgage lender, a portion of your monthly mortgage payment will be used to pay your property taxes. The lender will estimate the annual property tax amount and divide it into monthly payments, which will be collected along with your mortgage payment. The lender then pays your property tax bill on your behalf.
  2. Increase in Mortgage Payment: If your property taxes increase, your mortgage payment may also increase. This happens because the lender recalculates the amount needed for the escrow account to cover the higher property tax bill and adjusts your monthly mortgage payment accordingly. This increase can happen annually, as property tax rates are reassessed on a regular basis.
  3. Prepaid Property Taxes: When you purchase a home, sellers often pay property taxes in advance for the portion of the year they own the property. In Alaska, property taxes are usually paid in September, covering the period from July 1 of the previous year to June 30 of the current year. If you purchase a home mid-year, you may need to reimburse the seller for the portion of property taxes they have already paid.
  4. Tax Deductions: While property taxes do not directly affect your mortgage payment, they can impact your overall financial situation. In Alaska, property taxes are tax-deductible, meaning you can include them as an itemized deduction when filing your federal income taxes. This deduction can reduce your taxable income, potentially lowering your overall tax liability.


It is important to note that property taxes vary depending on the location and assessed value of the property. Additionally, other factors such as property tax exemptions may also apply. It's recommended to consult with a tax professional or real estate advisor to understand the specific impact of property taxes on your mortgage payment in Alaska.