Homeowner: Will You Face Higher Mortgage Payments?

If you’re currently a homeowner, you might be feeling quite good that you purchased your home before the market got crazy with higher prices and interest rates. But, there is a possibility that your days of basking in glory are coming to a close. You might be facing higher mortgage payments for next year.

Most homeowners pay their taxes and insurance into an escrow account with their mortgage payment.  The lender monitors the account to be sure there are enough funds available when the taxes and insurance are due.  If there is a shortage, it could cause your payment to increase.

Here’s a little stat. The national average increase in home prices in 2021 was just under 20%, but it might have been quite higher in some local markets. And, that increased value of homes doesn’t just affect buyers – it can affect that assessed value of properties across the entire area which results in all property taxes rising across the board.

Various taxing authorities, like state, city, school, and other special districts, can establish the rate they charge and exemptions that apply.  In most situations, there is a state assessment procedure for establishing the value subject to tax.

Normally once the assessment is published, there’s an opportunity for the owner to challenge the value. As an owner, you can submit evidence which would justify lowering the assessment such as comparable sales which indicate a lower value. Other factors could be mistakes in the size of improvements, mistakes in lot size, or possibly the deteriorated condition of the property.

If you aren’t comfortable with doing this type of an assessment, there are companies who will represent sellers with the effort of lowering their assessment. Normally, they will charge a flat fee and a percentage of the property taxes saved by lowering the assessment. As an example, some assessed values this year have gone up as much as 35-40% and it may not seem fair, but it really does accurately reflect market value.

Get started by investigating your situation as soon as you are notified of this year’s assessment.  In most cases, the owner can represent themselves in the matter, but they will need to accumulate accurate, comparable sales, not use automated value models, found online.

Your real estate agent may be able to provide you a list of comparable sales. I can provide Insider Information on Fairfax VA homes for sale. Get you a FREE Market Snapshot Report of Your Northern Virginia Home’s Value, or  Search All Northern Virginia Homes For Sale. Put that data you need at the tips of your fingers!

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