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Do I get a tax advantage from having a mortgage? |
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Are purchase loan points tax deductible? |
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Is the interest on a home equity loan tax deductible? |
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Who can tell me what my property taxes will be? |
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Why do I have to prepay property taxes and how are they calculated? |
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How are my property tax bills paid? |
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Do I need to send my tax bill to you? |
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Will you pay my tax bill? |
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How can I verify that my taxes have been paid? |
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I have received a tax reassessment. Do I need to send this information to you? |
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I have received a homestead exemption for my taxes. Do I need to send it to you so that you can adjust my payment? |
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Effect of Refinancing on Your Personal Taxes |
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Do I get a tax advantage from having a mortgage? |
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You should consult a tax attorney or accountant for specific details,
but interest on a mortgage is usually tax deductible.
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Are purchase loan points tax deductible? |
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For most taxpayers, points paid on purchase loan transactions are tax
deductible in the year the home is purchased. Upon request, Shearsons Mortgage will convert loan fees not paid to third party service providers
to points. Fees eligible for this conversion are processing,
underwriting, funding and administration fees. Tax consequences vary
depending on the specifics of the transaction and the taxpayer.
We encourage you to consult your tax advisor regarding your tax
situation.
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Is the interest on a home equity loan tax deductible? |
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In most cases, the interest paid on your home equity loan will be
tax deductible up to 100% of the value of your home. There are
some restrictions, so you should consult your tax advisor regarding
your particular situation.
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Who can tell me what my property taxes will be? |
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The seller and/or your Realtor should provide you with the current
taxes for the property. Property taxes are reassessed from time
to time, so this amount may change. If you would like to confirm
what your taxes would be, you can contact the county Recording
Office.
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Why do I have to prepay property taxes and how are they calculated? |
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Lenders want to make sure that property tax payments are kept current,
so they require you to deposit an amount ranging from 2 to 8 months of
your property taxes into an impound account in advance. If you are not
using an impound/escrow account, the lender will require proof that
the taxes on the property are current. Each county and state has its
own formula to calculate property taxes, but for the most part, your
home's assessed value is multiplied by the local tax rate.
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How are my property tax bills paid? |
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It depends on your loan program and state requirements. Generally,
if your monthly mortgage payment includes money for property taxes,
these funds are held in escrow by the lender and the lender pays your
property taxes as they become due. Generally, if your payment does
not include property taxes, you are responsible for paying them by
the due date mandated by your state.
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Do I need to send my tax bill to you? |
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Tax bills are needed only in the following situations:
- Tax bill is for a delinquent or corrected amount
- Tax bill is a supplemental or added assessment bill
( Please Note: These bills are not generally paid by Shearsons Mortgage
unless specifically requested by you or the bill is delinquent)
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Will you pay my tax bill? |
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If you have an escrow account that includes a tax collection, then
Shearsons Mortgage will be responsible for paying your property
tax bills.
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How can I verify that my taxes have been paid? |
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You may contact your local tax authority or our office, to verify
the last tax disbursement.
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I have received a tax reassessment. Do I need to send this information to you? |
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Your local tax authority will bill us for the adjusted tax
amount and we will adjust your escrow account accordingly
at that time. There is no need to notify us.
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I have received a homestead exemption for my taxes. Do I need to send it to you so that you can adjust my payment? |
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Your local tax authority will bill us for the adjusted tax amount
and we will adjust your escrow account accordingly at that time.
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Effect of Refinancing on Your Personal Taxes |
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With a lower interest rate on your home loan, you will have less
interest to deduct on your income tax return. That, of course,
may increase your tax payments and decrease the total savings
you might obtain from a new, lower-interest mortgage.
You should be aware of an Internal Revenue Service (IRS) ruling
with respect to points paid solely for refinancing your home
mortgage. IRS regulations require that interest (points) paid
up front for refinancing must be deducted over the life of
the loan, not in the year you refinance, unless the loan is
for home improvements. This means that if you paid a certain
number of points, you would have to spread the tax deduction
for those points over the life of the loan. If, however, the
loan or a portion of the loan is for home improvements, you
may be able to deduct the points or a portion of the points.
Check with the IRS regarding the current rulings on refinancing,
particularly if you are using the new loan to make home
improvements.
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