If you just purchased a home in Southern California and are wondering if you can impound your own property taxes yourself the answer to this question is yes.
Over the years we’ve found the ratio of people who want to pay their own property taxes to people who prefer to have them impounded by their lenders to be about 50/50, so your decision to pay your own property taxes or not totally depends on your personal situation and what will work best for you.
Paying Property Taxes Yourself
Yes, you can pay your own property taxes yourself, if you are not required to have an escrow account by your lender, because some mortgages (FHA) do require escrow accounts, while others like VA mortgage loans do not.
Every mortgage company has different requirements regarding escrow accounts. For example, Bank of America will let you pay your own property taxes if you have a conventional mortgage loan and no Private Mortgage Insurance. Other lenders will let you pay your own property taxes yourself if you either paid a 20% down payment when you bought your home or you have paid your mortgage for at least one year.
Avoid Paying Your Property Taxes Late
Paying your property taxes yourself is a big deal, you should make sure that you know when your property taxes are due just so you can save for the tax you will be required to pay and make those payments on time.
In Orange County, the first installment of property taxes is due on November 1st and is considered to be delinquent if paid after December 10th. If you pay your property taxes late in Orange County you can face a 10% penalty. The second installment of property taxes is due on February 1st and is considered to be delinquent if paid after April 10th. (Source ttc.ocgov.com)
Having Your Property Taxes Impounded
One of the easiest ways to get your property taxes paid every year is to have them impounded by your lender because a portion of your monthly mortgage payment will be placed in an impound account and paid on your behalf when they are due.
Many borrowers will choose this option because the impound account (escrow account) is also used for paying insurance payments that have to be paid throughout the year and since these payments can come up infrequently it’s easier for some homeowners to have the lender make these payments on their behalf instead of having to make these payments themselves.
To learn more about if you should have your property taxes impounded, or if you should pay them yourself, contact Fred Sed Realty today by calling us at (800) 921-9231 or click here to connect with us online.