Maybe you had a case of sticker shock when you received your property tax bill, which is notoriously high for many residents in Texas. But beware, that already high bill can quickly become a lot more expensive if you are late making your payment.
For many homeowners, the amount due is automatically paid by their lender from their escrow account. It is a good idea to double check that it has been paid.
And certainly, make that payment if you pay it yourself.
Traditionally, the deadline to pay is Jan. 31, but since that is a Sunday, some taxing entities have made the due date Feb. 1.
Late penalties add up. And fast.
Immediately after that, if tax collectors haven’t received what you owe, they start penalizing you.
The tax collector adds on a 6% penalty and 1% interest in February. Then each month, each of those goes up one more percent.
Eventually, the penalty maxes out at 12% in July, but the interest that is added can keep going up one percent per month even after that.
After you are several months delinquent, you can expect the taxing entity to turn it over to a collections firm, which can charge an additional 15 to 20%.
Collin County has a chart to illustrate this. If you wait until sometime in July to pay, you would be facing a very steep total penalty of 33%. Let’s say your original property tax owed was $7,500. With all the penalties tacked on, by July you would owe $9,975.
So, make sure you pay on time or set up a payment plan.
Home prices expected to rise
If you don’t already own a home and my property tax warning didn't scare you off, this might.
The Texas A&M Real Estate Research Center has released its Texas Housing Economic Outlook. The center is expecting home sales across the state this year to rise by 8.4% and the price per square foot to also increase by 8.3%.
As prices increase and homes sell at a brisk pace, they expect an “especially low” number of available houses in that ever-popular but oh-so-elusive price range of $300,000 or less.
But good news: Low interest rates mean you may be able to afford a more expensive house without it having as much of an impact on your monthly mortgage payment.
Mortgage rates hit historic lows many times in 2020, but they just jumped last week, so we will see if that trends back down again in the weeks and months ahead.