Impact of Home Assessments on Mortgage Payments, Part 2

In part one of this two-part blog series, we went over some of the basics of a home assessment, including how it compares to home appraisal and what it’s used for. Home assessments are carried out by local government bodies to help adjust property taxes and insurance areas based on several factors, and homeowners have to be prepared for them and how they might impact mortgage payments years into the loan.

At Altius Mortgage and our partners at Mortgage Ogden, we’re happy to explain how a home assessment might impact any of our mortgage loans, whether you’re a first-time homebuyer or a seasoned real estate flipper. In today’s part two, we’ll look at the timing factors to keep in mind for home assessments, some additional factors that play a role in how property taxes change throughout homeownership, plus the end-of-year statement you’ll receive to help you keep all this straight.

Home Assessment Timing

When you apply for a mortgage, one of the steps your lender will take will be to set up the escrow portion of the loan using the current property tax numbers involved – these, as we’ve been over in part one, are based on several factors, including the value of the property itself.

In many cases, be aware that your first home assessment as a new resident may not come until a year or more into your mortgage. However, it’s possible for your property taxes to go up during this time even if you do not have a home assessment done – this is because property taxes are also based on a few other areas, which we’ll go into in our next section.

Other Factors in Property Taxes

While your home assessment will be a large factor in your property taxes when it’s completed, it’s important to realize that there are other determinants of these taxes as well. These include:

• Schools
• Local infrastructure
• Public services such as trash collection or street cleaning
• The economy (when it’s doing well, taxes tend to go up; when it’s doing badly, taxes may drop)
• Home improvements and other areas that impact the assessment

End-of-Year Escrow Statement

So how do you keep track of property taxes and how they impact your mortgage? Simple: At the end of each fiscal year, your lender will send you a detailed loan summary that includes details on your escrow account and whether the funds in there were enough to cover property taxes and homeowners’ insurance. If so, you have nothing to worry about. If not, you’ll either have to pay a lump sum or have the larger payment incorporated into your monthly payments each month in the upcoming year.

For more on home assessments, property taxes and how these factors impact your mortgage payments, or to learn about any of our mortgage loan or refinancing services, speak to the staff at Altius Mortgage today.