Can I Lose My Home if I Stop Paying Property Taxes?

4972357447_b5a59a0482_zOne of the many responsibilities that come along with home ownership is paying property taxes. Many mortgage lenders will wrap the amount of your property taxes right into the amount of your mortgage payment every month, so you don’t have to think about it and don’t risk missing a tax payment.

Some people prefer to pay their property taxes separate from their mortgage payment. Doing so requires a great deal of self-control and money mastery. Making your own quarterly property tax payment means that you have to be able to think ahead and set aside enough money to cover your tax bill. Most people who decide to go this route have a set dollar amount  from every paycheck automatically channeled into a separate bank account that is set up specifically for property taxes.

This is actually a solid financial idea for those people who have good control over their money, especially if the account you keep your tax money in generates interest. In a sense, your property taxes can make money for you.

On the other hand, being able to set aside that much of your paycheck can be difficult for some people to do – leading to missed property tax payments. Falling behind on one payment can start a dangerous trend and thought process.

“If I missed one payment and nothing ‘happened,’ I’m sure it’s ok if I miss just one more payment while I use that money to catch up on other bills.”

That line of thinking is dangerous because it is faulty. As soon as you fail to make one of your property tax payments, your mortgage lender will typically make the payment for you. While this may sound like a good thing, you must know that your lender isn’t doing you any favors. They’re simply protecting themselves and their investment.

Failure to pay property taxes gives the government the right to place a lien on your home. The concept of a lien can be confusing, but it simply means that there’s a virtual sign on your home letting everyone know that you owe someone money. Additionally, repeated failure to pay your property taxes can lead to the sale of your home or the lien by the government so they can recover the money you owe. If you attempt to sell your home before the government can sell it, your tax liens will appear on a title search, scaring away any potential buyers.

Property taxes are not something that you can simply ignore. They finance important government services like schools! Failure to pay your property taxes means a blatant disregard for your duty as a homeowner in your community.

If your mortgager puts up the tax money you owe so the home isn’t sold out from under them (tax liens take precedence over mortgages), you will then obviously owe even more money to your lender. They will likely bill you for the money they paid toward your property taxes, expecting you to keep current on all monies owed. Failure to stay current with your mortgage company will lead to – you guessed it – foreclosure.

Can you miss a property tax payment or two? You can, but it’s a really bad idea.

Can doing so lead to the loss of your home? Absolutely. If you’re thinking of skipping a property tax payment in order to funnel that money elsewhere, you need our help. We’ll sit down with you and figure out a better way to reorganize your debts so that you can stay in your home, pay all of your monthly bills, and maintain a decent credit score. If you’ve already missed some of your tax payments, we’ll help you negotiate with your lender so you can get back on track with a payment plan that brings your mortgage and property taxes current.

 

Image credit: Marycat879

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One Response to Can I Lose My Home if I Stop Paying Property Taxes?

  1. Pingback: Can My Homeowners’ Association Foreclose on My Home? | Veitengruber Law

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