Failure to pay property taxes when due can lead to serious consequences… fines, interest, property liens or even foreclosure.
Most lenders require monthly mortgage payments to include an escrow for one twelth of the annual property taxes. If your taxes aren’t a part of your monthly payment, make sure you’re setting aside enough to cover the annual taxes when due.
Generally, if you fail to pay your property taxes for an entire year, the municipality will forward your account to the county treasurer for collection. The treasurer at some point can take legal action by placing a lien against the property. A tax lien impedes your ability to refinance your current mortgage, to seek a second mortgage or to secure a home equity loan.
A tax lien supersedes any existing mortgage against the property – so the treasurer will more than likely inform the lender of the lien and the lender in turn may take action against the homeowner.
