Question by Amy: I am refinancing. Is it better to pay property taxes on your own, or allow the mortgage compmay to do so?
I think it’s better for me financially to pay them on my own, correct? I used to have the mortgage do it because it’s hassle free.
DeeDee, my taxes are paid quarterly. So I would need to have money set aside for when they’re due.
Ah, I forgot to add that I have been asked if I am also paying for home insurance on my own. Shouldnt this be done by the mortgage company?
Best answer:
Answer by Great Scott
It’s 6 of one, half dozen of the other. I’d recommend the mortgage company do it..it’s free and you don’t have to worry about it.
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I like to pay on my own to make sure there are no glitches. That is the upside. The downside is the taxes are usually payable once or maybe twice a year, so you have a larger amount to pay all at once, instead of monthly.
Pay the property taxes yourself – two reasons:
1) You know for sure that the taxes will get paid. You can only assume that the mortgage company will pay them on time – if the company goes bankrupt (which isn’t unheard of lately) you’d be on the hook for the unpaid taxes, even if you already paid the mortgage company for the property taxes;
2) You can choose when to pay the tax. If property taxes are due in February, you can pay them before December 31st instead, giving you the tax deduction a year earlier on your federal income tax return (state tax return too, if your state allows a deduction for property taxes). You can’t do this if the mortgage company pays the property taxes for you.