Ya just gotta know that when things seem to be going along smoothly, something has to happen to change that.
Anyone (at least in my state) who’s ever mortgaged a home and escrowed the taxes and insurance, is familiar with the annual escrow analysis review. If you’re lucky, your monthly mortgage payment then either goes down or doesn’t change, but for most of us the payment goes up a wee bit because the taxes and/or insurance always manage to go up. Usually, it’s not a huge problem.
I just got my annual escrow review statement, and my mortgage payment is going up by $171 per month! I don’t know about anyone else, but for me that’s a chunk of change I wasn’t anticipating.
Sure, I knew that buying a property owned by an old lady who then died would result in the loss of the senior exemption, and I knew that loss would be recaptured on the next year’s tax bills, so I was aware my payment likely would go up at some point – but I thought it would be by no more than $50 or $60 a month.
Sigh.
Yes, I can meet the new payment, but it means that repayment of those home improvement loans will take a little longer. I had been taking any excess cash each month and applying it to those loans, but now I’ll have to apply it to the new mortgage payment instead.
But at least we’re in a nice, safe neighborhood, with good neighbors – right?
Could someone, or something, jump that 4-foot chain-link fence? Probably.
At 5:00 am this morning, I was in The Important Room doing a little reading and waiting, when all of a sudden I heard men yelling – and it sounded like it was right outside my house! I jumped up and looked through the blinds into the back yard, at which point I saw someone switch on one of those really bright flashlights the police carry – and it was only then that I noticed the flashing police lights on the street behind us. As near as hubby and I can figure, the gas station on the corner must have been robbed, and the robber then took off on foot through the parking lot of the church across the street from the station, which church property happens to abut my back yard.
Hubby’s immediate response to all the commotion was to tell me not to go out there for awhile (D-u-h!)
Puppy Cody did her job from inside the house. When she heard the yelling outside, she began barking excitedly to make sure ALL her people GOT UP DAMMIT! There was STRANGER DANGER! She wanted to go OUT and DEAL WITH IT! (We made her wait, of course.)
I don’t think anyone actually jumped the fence into the yard, and once it was light enough out, Puppy Cody, hubby and I all searched for anything that might have been thrown over the fence into the yard, and found nothing.
Needless to say, hubby and I are both a little more tired than usual today.
Darn, CM, can’t you ever have any good news?
Well, yes, actually I can. When the mail came today, it included a check from New York State for the annual rebate on school taxes, and since I’m over 65, I get the enhanced rebate. My check was enough to cover the entire escrow shortage on my mortgage!
That check is already in the bank. I was afraid if I left it in the house over the weekend something bad would happen to it – either it would get lost, inadvertently shredded, or burned up in a freak house fire.
Now I don’t have to worry about any of that and can enjoy the rest of my weekend.
And to round out the week, hubby and I are getting free chicken dinners today. The church pastor (who lives next door) came over the other day and gave us two tickets to their chicken barbecue. He said “The Church wants to buy you dinner.” I don’t know why the Church wants to buy us dinner – and I do love our new neighbors – so I’m sure not going to refuse!
HOPE YOU ALL ENJOY YOUR WEEKENDS. TGIF!
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I love to hear from my readers. You may comment on this post, comment on my Facebook or Twitter pages, or email me at cordeliasmom2012@yahoo.com
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Images by Cordelia’s Mom
Cordelia's Mom, Still 
I understand. Our assessment went up $10000. and we did nothing to the house…that they know about. Our school taxes alone went up almost $500. for the year. We don’t have a mortgage anymore but I used to get an increase every year on the bill for underage and freak out. I did fight it one year and won….but then they got me the next time.
Glad everything worked out. Enjoy your weekend. Your picture is lovely.
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Thanks, Jane. Just one of the many aspects of home ownership.
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It’s always good when good news steps in to balance bad news. I hope they catch the bad guy. Give Cody a scritch and a hearth “good dog!”
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My husband thinks they did get the bad guy. He thinks that’s what the yelling was – in front of our house. I never looked out the front window, and neither did he.
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at least there was some good news!
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Definitely good news. But I would have handled everything regardless.
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We built our first home on undeveloped land. And it nearly killed us that second spring when the tax bill came. Never build on undeveloped land. I rarely give unsolicited advice, but that one, and Don’t let them turn the baby in utero — I can’t help myself. These things need to be said.
Our bill goes up a skosh, coupla cups of coffee. We live between the hood and the hipsters, but no one knows we’re here, so it’s quiet.
I’m glad your check was a plus and free chicken? Yes, please!
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That’s the downside to new builds and major renovations – the town will reassess and the taxes go up. Fortunately, all our renovations were for structural reasons (basically just to bring the house into living condition), and we didn’t do anything like add a room or finish a basement. Those would have resulted in an increased tax basis.
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Sometimes it seems that Americans speak a foreign language, and not English at all 🙂
Over the years, we’ve owned 4 homes and had three mortgages (we bought our current home mortgage free). I know that “property taxes” are what we call “rates” but I had no idea what an “escrow review” was. I had to google for an explanation. As far as I can ascertain, escrows and mortgages are never seen together in Aotearoa New Zealand. Then there’s “senior exemption”. Still no clue on what that is.
I know what a “tax bill” is, although only in the context of owning a business. I haven’t filled out a personal tax form for more than twenty years. For most income earners, completing a tax return is optional, and as mine usually shows a refund or due amount of $10 or less, the effort isn’t worth it.
Then there’s the oddity of taking out a loan for home improvements. Whenever we’ve been in the position of not having enough savings for them, we’ve increased the mortgage to cover the costs. Here the interest rate on mortgages are significantly lower than any other form of borrowing, and once you have one, it’s much easier to increase it than to borrow elsewhere.
As to “school taxes”. I can guess what they probably are, but can’t conceive how they might be collected or why one might get an “enhanced rebate” if over 65. But what really floored me was the rebate came in the form of a “check” (or “cheque” as they were called here). I haven’t seen one in decades, and the last one I received was some time back in the early 1980s.
Finally, there’s “the important room”, by which I assume you mean the bathroom. However, in a Kiwi home, the bathroom is not the most important room, although it is typically right next to the most important room 🙂
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Ha! Had you clicked the link, you would have been taken to my wonderful post about “The Important Room” which is, indeed, the bathroom. Since I have colitis, that is the most important room in the house!
Here, we pay property taxes to the town, county and school district, and most mortgage lenders require that those taxes be paid through an escrow account held by the lender. That way, the lender can be sure the taxes will actually be paid and the house won’t be foreclosed by the taxing authorities. The escrow account is funded by adding 1/12 of the year’s total taxes to each monthly mortgage payment. Therefore, if any of the taxes go up, the mortgage payment goes up. The lender also requires that homeowner insurance be in place to cover the mortgage, and the premium for that insurance is included in the escrow account and added to the monthly payment.
At some point, our state decided to give back some of the school taxes through a STAR program. For years, the amount of the reduction was applied against the school tax bill, making the bill smaller and thereby making the homeowner’s mortgage payment smaller, too. But in the last couple of years, the state decided to simply send out checks for the amount of the STAR reduction – which, of course, is great because it’s money in the pocket – and the actual tax bill stays at the “true tax” amount, which is higher and thus, the mortgage payment is higher because the escrow is higher.
People over 65 are entitled to an additional rebate on the school tax, but if the home is sold to someone younger than 65 or if the 65-year-old homeowner dies, that additional rebate is automatically cancelled. There is also a senior tax reduction on the county tax bill, for people who are not only over 65 but also make less than $30,000 per year in income. The house I bought carried both senior exemptions, which were then lost and added into the next year’s tax bill. I wasn’t yet entitled to the reduction myself, so the amounts were added back into this year’s bills.
The good news is that I now do, at least, get the additional school tax reduction, and once I retire permanently, my income will drop enough to make me eligible for the senior discount on the county tax. The mortgage payments will drop accordingly.
Yes, it’s all very confusing, especially to new homeowners. I can’t tell you how many times in my life as a real estate paralegal, I received panicked calls from clients stating that their mortgage payment had just gone up because the escrow went up. They always thought the bank was playing games with them.
The bank was not playing games. It’s one of the many realities of owning property in New York State. I understand NYS is one of the highest taxed states (if not the highest) in the US.
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Except that in a typical Kiwi home, the toilet roll, holder and “throne” are not in the bathroom. The thought of sharing a room where one bathes, cleans teeth, applies make up, etc with the need to answer “calls of nature” is kind of gross. What is colloquially known as “the smallest room” is usually near but not part of the bathroom.
Our taxation system is less complex than in the USA. We pay property tax (if you own land) to the local authority (the equivalent of town/county/city) based on the property value, and income tax to the IRD (Inland Revenue Department). That’s it, there are no other taxes. No stamp duty, death duty, inheritance tax, gift tax, or capital gains tax etc. For most people, income is taxed at source, which is why there’s usually no need to complete a tax return.
We own a relatively high value property for this area, so our rates (property tax) are close to NZ$4,000 per year, which is very high, and my income is taxed at 19.5%. Having a publicly funded health system means we have more disposable income than perhaps someone in a similar situation in America would have.
I’m puzzled why NY state would distribute refunds by
chequeschecks. If posting mail is anywhere near as expensive as it is here, the cost would be ridiculous. Why weren’t the refunds paid out by electronic transfer? Surely that would be far cheaper?Perhaps our banks are more trusting than those in the USA? The mortgage agreement typically stipulates that the mortgagee will insure the property, and keep it in reasonable condition, but I’ve never heard of anyone being required to establish an escrow account.
Our “fixed rate” mortgages aren’t really fixed rate, unless the mortgage is short term such as 5 years. Typically fixed rate means that the interest rate is re-evaluated every 2 or 5 years, whereas a floating rate means that interest rates changes monthly or quarterly with whatever the current rate happens to be. Most mortgages are floating. When we had a mortgage, interest rates fluctuated between 3.5% and 23% depending on the country’s economic situation. I can tell you the 23% was painful 🙂
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I guess there’s good and bad in both countries. A fluctuating mortgage rate would put me into bankruptcy, as would a high tax rate on either property or income. But you have better health care, and apparently your banks don’t treat their customers like scum. As for New York State, pretty much nothing they do makes a lot of sense. Those checks always come out just before election time (coincidence? of course not), even though the State requires that any income tax refunds must be made electronically. I would rather it had been done electronically – I knew the checks were about to come out and was worried my check would either get misdirected or stolen.
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That’s one helluva hike! Over here, when the interest rate changes, mortgages are effected the following month for raises and perhaps two months for reductions. I’m glad we don’t have a mortgage now as we live on a budget but have a little wiggle room for emergencies. Local taxes take a huge wedge out of our funds, but our utility/heating bills are pretty reasonable, and almost half of our friends!
Our back garden is completely fenced in with panel fencing, so we don’t see a lot of what’s going on in adjoining properties, though we do hear it. We hear sirens a fair amount, and on a couple of occasions an ambulance has come into our road.
Otherwise, it’s pretty quiet here apart from the roar of the sea!
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Adjustable rate mortgages aren’t too popular here, because it seems the interest rate always goes up rather than down. Most of our mortgages are for fixed rate, 30 year loans. But there’s no real control over the property taxes, so the monthly payment can still go up or down based on the taxes.
We opted not to get panel fencing mostly because of the cost, but I do like the look of our chain-link against the trees. We’ve been here more than a year and never had any problems, even when we didn’t have the fence. I think this was just a freak event.
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The solid fences work for us as there are dogs on our left and at the bottom of the garden. Both tend to bark when they see other dogs. Luckily for us it was already here and would have cost us hundreds of pounds, but at least it’s better quality and stronger than the panel fences we had in the cottage…….. a couple of gusts of high wind (and we had them believe me!) and we were out in all weathers propping the damn things up!
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I’m so sorry you didn’t find anything that might have been chucked over the fence. But at least you got that rebate check, which will help with your mortgage increase. While you’re enjoying your free chicken dinner you might want to inspect the church grounds to see if maybe something might have instead been tossed over their fence.
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I did eyeball the church grounds from my side of the fence and didn’t see anything. I often find empty glassine envelopes, though, that are blown over on windy days – from both neighboring sides. I think now I have an idea where they come from.
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Ouch, CM. The first year after we bought this place, our reassessment brought a large tax hike.
I’m glad your STAR check came to ease your pain.
Enjou the chicken dinner on your nice neighbors.
Good Cody!
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I guess you feel my pain, then. You get STAR exemptions too, right? Hopefully, your check will be there soon if you didn’t already get it.
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Yes, we are in the STAR plan, CM.
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Those annual reviews that always seem to add to the mortgage was another reason I ended up having to sell my house. Despite all that tax stress though, it was nice to see you also had some good news as well… evens things out a bit and makes the bad not so bad.
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I’m sorry you weren’t able to keep your house. That just sucks. When I bought my current home, I did calculate for added taxes somewhere down the line and built in a cushion for that. Now I’m especially glad I didn’t buy a more expensive home.
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lets break this down –
1. I always dreaded the escrow review, not once in 30 years did it ever go down. Who are they kidding?
2. A robber running through my backyard would be enough for me to stay in the house for at least a month. Yikes!
3. A rebate on school tax? Annually? Enhanced after 65? I think we all need to move to New York.
4. The church wanting to buy you dinner is so nice. Yay for good neighbors. And chicken!
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You do not want to move to New York – ever. Any tax rebate you might get is offset by taxes on everything else – there’s even a special tax on take-out food! We only stay here because our kids are here, and of course, they stay here because they grew up here. We’re used to being taxed to death.
I don’t think the robber actually ever came into the yard. I’m pretty sure the fence stopped him. Yay for fences!
I love the pastor and his young family. I don’t even mind when the kids run across my front yard occasionally because they’re so adorable. Trust me, this is a complete turnaround for me after the last neighborhood. Which, of course, is why we moved in the first place.
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You’re right of course, it’s just that Maine keeps increasing school taxes and nothing ever seems to get done. It’s a bit of a sore point.
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TAXES never go down. Ever. But sometimes, insurance does. A little bit. But mostly, not.
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I don’t think I’ve ever had insurance go down, either. In fact, for my current house, I was originally quoted an outrageous premium because my regular agent was on vacation. Shopping around, I didn’t find anything too much better. But then, my agent returned from vacation and worked some kind of magic because we’ve been clients for so long, and being local, he also knew the neighborhood. I sure hope he never quits or retires!
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There’s nothing like having a dog to keep folks out of your yard!
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Oh, Cody definitely does her job when she needs to. She has a nice, deep bark, which helps.
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Well, at least they give a discount to old people around there, I swear they raise the taxes here when you turn 65. It’s always something. Enjoy the chicken!
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At this point, I’ll take any discount I can get. There has to be some perks for surviving this long. (The chicken dinner was delicious.)
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I have family in North Carolina and they are shocked when I tell them what our taxes are up here. They are so darn high as it is we don’t need them to go any higher! So sorry to hear that yours did. What a huge bummer! And what about that excitement in your neighborhood… That’s the kind of excitement I could live without and probably you too, thank you very much! We live in a really safe neighborhood thank goodness but… One day at 2 in the afternoon mind you in broad daylight, my husband caught somebody who had backed up into our driveway in order to steal the pile of mulch bags that my neighbor had piled in his turnaround. When these people knew that my husband saw them they flew out of our driveway at a speed that left skid marks on the pavement. Unbelievable what some people are capable of doing. And yes I did have a great weekend, mostly resting and watching a couple of series that I’m really into. Plus I have my nose in a really good book as well. Seeing that it was raining and very cold it was a good time for me just to chill inside. I hope you did not take it the wrong way when I laughed when you said oh thank heavens you didn’t leave a link. Your photograph FYI was not all that bad. Come on! 👏👏👏
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That deer photo I posted really was that bad, but it certainly was amusing. Maybe when I get my camera back, I can try again.
Hope your family in the Carolinas is far enough inland to be safe. I’m not up on my geography. We did have people in the Carolinas, but they moved back up here about a year ago.
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My family will feel the effects of that hurricane. They are not however on the coast. But they will most definitely get hit. Thank you for your concern. I am going to be putting a call into my sister later on today.
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PS Hurry up camera get back to CM!
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Will do. As soon as Nikon is finished repairing it.
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