Top 5 Things to Know Before Getting a Property Tax Loan

When it comes to property taxes, everyone can use a little help now and then. If you are in need of help, applying for a property tax loan can be your only option to keep your home. However, loans of any kind can be tricky, and property tax loans are no exception. If you are in need of a loan, you don’t want it to lead to even more financial troubles. Follow our tips to ensure that your property tax loan is helpful, not hurtful.

1. Don’t avoid payments.

No matter how much you try to avoid a problem, it doesn’t make it go away. When it comes to taxes, this is even more true.  Not paying property taxes can be one of the most expensive mistakes you can make. By law, taxing units like your county can charge fines for missed payments. These penalty charges can cover interest and attorney fees and vary anywhere from middle to high percentage in the first year alone, and that grows each year. When it comes down to it, if your options are ignoring payments or applying for a loan, a loan can be your lifesaver.

2. Find the right lender.

Not all Property Tax Lenders are created equal. First and foremost, all lenders must be licensed by the State you live in. To make sure your lender is licensed, ask them for their license number and if they refuse, then you know not to work with them. Make sure you research who you trust with your property by looking into their BBB rating. Once you select a lender, make sure you get as much information about your options as possible, such as grace periods, so you can know what to expect.

3.  Understand the purpose of a property tax loan.

Property Tax Loans exist to prevent a taxing unit from foreclosing on property; essentially allowing you to keep your home. If you get to the point where you are unable to pay all your owed taxes, a property tax lender will cover the expenses and set up a payment plan that allows you to repay the loan in a way that works with your financial situation. Once the lender pays your property taxes, the lien on your property is transferred from the taxing authority to the lender, giving them the right to foreclose on your property if you default on your loan. In layman’s terms, a tax property loans allows you to keep your home, set up a payment plan that works, and have direct communication with the party that controls the state of your property finances.

4. There are perks to property tax loans.

In the end, your property tax lender is there to help you. Property tax loans were created to stop the penalties, interest and collection fees that can pile up, and allow you to settle your finances. Most lenders do not require up front payment and most will immediately stop the taxing unit from pursuing a lawsuit. Property tax lenders usually charge less per month than county payment plans and allow you to pay early or extra if needed, without charging you extra. 

5. Know your options

There are options when it comes to property tax, some that mean you don’t even need to apply for a loan. For one, if you are over the age of 65 or disabled, you can get a tax deferral which allows you to not pay any taxes until you leave the property or are no longer qualified as “disabled.” If you do a tax deferral, you will incur interest of 8% during this period, but no penalties will be applied. Another option is to go directly to the tax office to set up a plan. By law, tax offices are required to offer payment plans, which means you can choose to avoid a loan. This option is available for a maximum of three years, and interest will still accumulate during this time. The final option is to apply for a property tax loan, which if you choose the right property tax lender, then you will be able to go through the process with ease.