Home Buying in 11757>Question Details

Karen, Home Buyer in Lindenhurst, NY

I'm new to this..is it true that when you purchase a house (NY) you have to pay the taxes up front for the?

Asked by Karen, Lindenhurst, NY Fri Jun 13, 2008

rest of the year?

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Yes. The reason the bank you are getting your mortgage from requires this up front tax payment is to ensure that they have enough money to keep your property taxes current should you default on your payments. This up front tax payment as well as your first year home owners insurance is known as your escrow.

Georgia Westcott
Broker/Owner
The Westcott Group Real Estate Company
17 Deer Park Ave
Babylon NY 11702
0 votes Thank Flag Link Fri Sep 25, 2009
Karen,

You will usually have to pay about 6-9 months of taxes at the closing. Some of it will go in to escrow to make future tax payments. The rest will be a credit toward the seller at closing.

Cori Kaplan
0 votes Thank Flag Link Fri Jun 13, 2008
Karen, generally buyers have their taxes and insurance rolled into their mortgage and in that case, you would be putting a chunk into an escrow account that is held by the mortgage lender and future monthly payments on your mortgage would also include a sum towards your property taxes and your homeowners insurance.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Fri Jun 13, 2008
Hi Karen,

Taxes are paid in Nassau county in 4 installments. The school taxes are paid twice a year and the town taxes are paid twice a year. The payments are prepaid until the next installment is due.

Taxes in Suffolk are paid twice a year. The school and town taxes are combined in one bill.

All the taxes are prepaid for the following periods. So for example if you were purchasing a house in Suffolk, your taxes would be split 1/2 would be due by Dec 1. and the other 1/2 by May 31st. The tax period is from dec 1 until nov 30th. If you close in August on a house, you would owe the seller the taxes she prepaid from your closing date in August until Nov. 30th.

If you have any questions, please do not hesitate to call,631-944-8829.
0 votes Thank Flag Link Fri Jun 13, 2008
While generally there are all types of property tax arrangements between buyers and sellers, commonly taxes are fairly prorated between the seller and buyer at the time of closing. Best that you review with your lawyer as to how ( you and he wish) to pursue the matter when the time comes, however.
0 votes Thank Flag Link Fri Jun 13, 2008
If you have a purchase financing arrangement which does not require escrow, which is unlikely in your situation as a first time buyer, but might to apply to others reading this thread, then the answer is no, you do not need to pay the taxes up front for the year. This would apply to purchase using an equity line of credit (HELOC) or a cash purchase. In that situation, there is no requirement to escrow the taxes and insurance, they remain your personal responsibility, the same as any other bill. So in that situation, the only adjustment at the Closing is reimbursement to the seller for any advance periods they have already paid.

The exact amount can only be calculated on the day of Closing, and it is normally agreed with the seller that they will accept a personal check from you up to a certain amount to cover that refund to the seller, normally no more than $500, but there is no set amount.
0 votes Thank Flag Link Fri Jun 13, 2008
Is your question about escrow?

Usually when you purchase a home depending on the date of the month you need to pay a prorated amount of real estate taxes and insurance unless you pay for these on your own, most people include this with the mortgage itself as part of escrows, an example for your question would be if the taxes are 3600.00 per year, take that divided by 12 gives you 300.00 per month is what you would escrow each month, however if your next payment is due in two months to your city and its a quarterly bill of $900.00 per quarter, they may ask you to pay $600.00 up front so that your excrows dont go negitive!
0 votes Thank Flag Link Fri Jun 13, 2008
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