If you receive tax bills from the government despite escrow, you should not be worried. Instead, you should contact your mortgage service to resolve the issue. Having an escrow account is one way you could solve problems with property tax bills.
They might not have paid tax on time that leads you to this tax notification. Tell your mortgage service about the tax receipt you received and why they don’t submit the tax.
Mortgage service might have some solid reason for this as if maybe money in your escrow mortgage account is lesser than your tax. Further, there might be some other complications that you can solve by talking with them. Have a relaxed breath if you receive a tax notification, even if you have an escrow.
Keep reading, and we will tell you the functionality of an escrow account and how you should respond if you receive a property tax bill despite having one.
What is an escrow?
Escrow is a term in real estate in which the mortgagee holds funds to pay for the taxes, insurances, and property taxes each year. It is a convenient way for all parties involved in taxes, loans, and other property issues to ensure that necessary bills are paid on time.
Whenever you buy a house, you must have heard that you need to make an escrow account with your mortgage company. You calculate the money of taxes and loans and transfer it to the mortgage account monthly. After that, your mortgage servicing company does the rest and uses this money to pay bills and funds.
However, if the money in your escrow account is more than your bills, you can request your mortgage company to return the excess funds.
How can tax clashes arise with a mortgage company?
Property tax bills are automatically mailed to your mortgage service provider. These agencies retrieve tax data online, eliminating the need for a paper copy of the invoice. Later on, the mortgage company contacts tax services for processing and payment of tax bills.
Although your company sends tax payments on time, tax services don’t remit payments on time usually. Therefore, the property owner asks mortgage companies about remittance and tax confirmation after regular intervals.
Furthermore, sometimes your tax is much higher while the money in your mortgage account is lesser. In this case, mortgage companies send a notification to you. If you somehow miss or ignore the warning appropriately, you might get a tax notification later on.
➡LEARN MORE: Ways you can Find Out How Much your Property Tax is
How to resolve issues with an escrow account
If your mortgage service provider didn’t pay your tax bill timely and you received the tax notification from the government, you should send a copy of the tax bill along with the notice of the error to your mortgage service. Wait for their reply, and resolve the dispute with mutual understanding.
If your mortgage service provider has failed to pay tax on your behalf, you should involve tax authority or insurance career as soon as possible. It is because if you or your mortgage service doesn’t pay tax, the government can put a tax lien on your property.
Also, check the money in your escrow account and check whether it’s enough to fulfill the bills. If it isn’t, then it is most probably your fault. In this case, there is only one possible solution to pay your taxes as soon as possible.
The most prominent benefit of the escrow account is convenience. You just have to make one transaction monthly and don’t need to worry about utility bills, taxes, and other expenses.
However, disputes can sometimes arise that you can resolve by talking with a mortgage service provider utilizing the methods given above in the article.
That is all from today’s tutorial. If you are still getting any difficulty with tax bills even after setting up an escrow account, feel free to contact us for any help!