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Originally posted by parth1970


How does this work? Mortgage company normally add home tax with monthly mortgage payment?

And if yes, is there any benefit for home owner?

Home owner can pay home tax at the end of year?

Thank you,

Parth

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Congratulations on buying your own sweet home. I hope that you have chosen a good variable mortgage rather than locking in at a fix rate as the rates are likely to go down.

The lender would like to make sure that the Property Tax is not in arrears at any given time. Most of the lenders would offer you this facility of collecting the property tax installments along with the mortgage installment and later on remitting it to the munispality themselves. For this the lenders make a 'separate tax account' and till such time they remit it to he munispality, they might give you some interest on your deposit as well.

The benefit to the home owners is that it does not pinch them too muchs s it comes out from their account regularly in small installments rather than they pay themselves either in a 'lump sum' or in 2, 3 or 6 installments.

If you want to pay it yourselves and your lender allows it, then you can pay it yourselves by enrolling in installments with Munispality. In any case you have to pay it in time to avoid penalties and the lender may ask you to provide proof of having paid the tax up to date and in time.