That portion of your payments is kept in reserve until the bills are due. Each year, the bills will be sent directly to your lender, who will make the payment for you. Most state and local governments impose property taxes, recording fees, and transfer taxes. Minimize your relocation stress. Our moving section offers checklists, free services, tips and more.
Property taxes are the most common expense to be prorated between the buyer and seller.
This process is referred to as an adjustment. Your closing agent will split the taxes so that you take responsibility for them at closing. If the seller already has paid taxes beyond that date, you reimburse the seller. Or, if taxes for the current period have not yet been paid, the amount owed is deducted from your settlement payment. Your lender may include property taxes in your monthly mortgage payments and put them in an escrow account for you.