Should You Pay Property Taxes Through Your Mortgage?

Hey there, Calgary homeowners! Jesse Davies here, your trusted local realtor, with some valuable insights into a topic that often comes up when discussing mortgages: Should you pay your property taxes through your mortgage? Let’s dive in and explore this option together.

Picture this: you’ve found your dream home in Calgary, signed the paperwork, and secured your mortgage. Now comes the question of how to manage those pesky property taxes. One option gaining popularity is to roll your property taxes into your mortgage payments. Sounds convenient, right? But is it the best choice for you? Let’s break it down.

First off, what exactly does it mean to pay your property taxes through your mortgage?

Essentially, it involves setting up an escrow account with your lender. Instead of paying your property taxes directly to the city, you make monthly payments to your lender, who then takes care of the tax bill when it’s due. This can simplify budgeting by spreading out your property tax payments over the year.

But convenience isn’t the only factor to consider. Let’s talk about the pros and cons.

Pros:

Simplified Budgeting: By bundling your property taxes with your mortgage payment, you can avoid the headache of remembering to pay a separate bill each month. It’s all taken care of in one fell swoop.

Predictable Payments: Knowing exactly how much you’ll owe each month, including property taxes, can make budgeting a breeze. No surprises when tax season rolls around.

Avoiding Late Payments: With your lender handling your property tax payments, you can rest easy knowing you won’t accidentally miss a deadline and incur late fees.

Cons:

Loss of Control: When you pay your property taxes through your mortgage, you’re essentially relinquishing control over those funds. Your lender holds the reins, which may not sit well with everyone.

Potential for Higher Costs: Some lenders may charge a fee for managing your property tax payments, adding to the overall cost of your mortgage. Be sure to weigh these fees against the convenience factor.

Escrow Adjustments: Your lender will estimate your property tax bill and adjust your monthly payments accordingly. If their estimate is off, you could end up with an unexpected increase in your mortgage payment.

So, is paying your property taxes through your mortgage the right choice for you? It ultimately depends on your individual preferences and financial situation. If you value convenience and predictability and are comfortable relinquishing some control over your finances, it could be worth considering. However, be sure to carefully weigh the pros and cons and consult with your lender and financial advisor before making a decision.

As always, I’m here to help navigate the complexities of homeownership in Calgary. Whether you’re buying, selling, or just need some advice, don’t hesitate to reach out. Happy house hunting!