Three steps to avoid property tax foreclosure in 2016
Winter taxes are soon due. Do you have a plan to pay them?
One of the truisms in life is that taxes will never go away. This is especially true for property taxes. For most towns and cities, property taxes are paid twice a year. If you don’t have an escrow account with a lender, or if there is no mortgage and you pay the taxes on your own, having a spending plan to ensure there are enough funds to pay the taxes is critical. Failure to pay on time results in late fees and penalties and even foreclosure. Here are some tips to help stop this from happening.
- Plan: Put your taxes into your monthly spending plan. Breaking down the annual bills into smaller, monthly amounts makes it easier to save. Even if you don’t have a house payment, set aside the amount of the annual taxes divided by 12 each month. For example: If your annual taxes are $2400, set aside $200 each month so that you have the full amount when it comes due.
- Communicate: Often and early with lenders, city or township treasurers or county treasurers. Make sure that all mail is opened and you respond to any requests and/or dates stated in the correspondence. More importantly, if your taxes are in foreclosure, you should attend the County Show Cause Hearings to set up a payment plan for delinquent taxes.
- Act : Take action to ensure that your property taxes are paid in full and on time. Once the taxes become delinquent, fees and penalties are added onto the balance, creating a larger balance to pay. Local and county municipalities are willing to work with homeowners who are experiencing financial difficulties but unless they are aware that you are experiencing difficulties, they cannot help you. There are payment plans through many treasurer’s offices for homeowner’s who ask for them.
If you treat the property taxes as a regular monthly expense, then when the bill comes, it won’t be overwhelming. Making changes takes time, patience, and discipline. However, the rewards include less worry over unpaid bills and ultimately, eliminates the chance of losing your home.
Michigan State University Extension offers financial literacy and homeownership workshops throughout the year to help you become financially healthy. For more information of classes in your area, go to either the events page or the MI Money Health website. Additionally, you can take the Financial Health Survey at MI Money Health to access if you’re financially healthy and discover more ways you can improve your financial health.
Michigan State University Extension has released a new toolkit for homeowners who are experiencing or have previously experienced foreclosure. This toolkit will equip these individuals and families with tools to help them recover their financial stability, in the case that a recovery of their home is not possible. The toolkit is available to download free at the MI Money Health website.