How Do Reverse Mortgages Affect Property Taxes? Read here for how getting a reverse mortgage could affect your property tax bill!
One of the most popular financial products available to senior citizens is a reverse mortgage. One thing that many reverse mortgage borrowers don’t consider is how the reverse mortgage will affect their property taxes. A reverse mortgage could affect property taxes in a number of ways.
Still Required to Pay
Another way that a reverse mortgage affects property taxes is that you will still be required to pay property taxes. Since you will still own your home, you will still be responsible for making payments. If you do not make property tax payments, your jurisdiction could eventually seize your home. To make paying real estate property taxes easier, some reverse mortgage lenders may allow you to open an escrow account. The escrow will accept monthly payment from you, and will then pay the taxing authority.
Could Lead to a New Assessment
Another way that a reverse mortgage affects property taxes is that it could lead to a new assessment of your property. When you get a reverse mortgage, you will be required to get a new appraisal. After a new appraisal is completed, it could lead your taxing authority to re-asses the value of your home.
Increase or Decrease Payments
The third way that a reverse mortgage could affect your property taxes is that it could either increase or decrease your property taxes. If the appraisal that is completed shows a value higher than what the taxing authority has your property assessed for, then you may be required to pay higher property taxes. On the other hand, if your assessment shows that the value of your property is less than assessed, then you could receive a decreased property tax bill.
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