Paying Property Taxes

**chatterweb** · 03-05-2006, 02:17 PM

We owe 2100 in property tax next month, due in full. Last year we paid on a credit card (0%interest). We have the option to do that again this year, or use money from our savings.
I just want some opinions of what you would think is smarter, since, I have an OPM type of mentality.
We have a few setbacks as well...
otherwise the money would have been saved up each month...
We are paying 2 mortgages right now, waiting for a home to get rented out..

we also had a setback late last year when DH broke his leg and was on state
disability.
We are waiting for the disability insurance money for that as well (1000.00)
Thanks for any advice, after our property is rented, we will have more room to breathe!!

**FrugalMomof3** · 03-05-2006, 02:29 PM

Here's what I am thinking.... you could use the CC wit ha 0% interest but how long is it 0% interest... If a year... that's good but by the time next year rolls around you will have due yet another tax payment and the 0% interest payment.

UNLESS you decide to each month put what you would have saved to pay off the tax bill ($175) and put into into a interest bearing savings account. Then when that one year rolls around you will have earned interest.

What I am saying is from now till next year same time, if you dont pay it off you will in turn have to save double $175 to pay off the $2100 you put on the CC and then $2100 which will be due again next year making you owe $4200.

I hope everything works out for you!

**halloweenfreak** · 03-05-2006, 04:06 PM

i dont know if all mortgage companies do this or not, but our property tax and home insurance is added to our house payments every month. our actual house payment is only 280 bucks, but we pay 376 every month to take care of the tax and insurance so we dont have to come up with everything all at once.

**chatterweb** · 03-05-2006, 04:38 PM

Thanks for the advice! We should be saving $350 each month for taxes, and we will...*sigh*
$300.00 auto transfers to the savings but lately I transfer it back..

DH just spent close to 500 in cash for a snowboarding trip. He got paid vacation time, but, he really needs to forget about trips now, and he is. So, I guess it is good he is working with me.

He also makes 20 an hour which helps and he works overtime too.

Right now it is the second home eating us alive! But, it is an investment and we have only been paying the mortgage 4 months so far...
We are impounded for that mortgage at least...It is our own fault, we were contemplating moving there because it is cheaper...wasted 3 months not having it listed for rent...anyways
I put the cards away so we can't use them...
We have 4 credit cards all at zero percent interest as late as April of next year:
And I keep getting more offers sooo tempting to keep transferring the balance for free...
1. 0% expires this July owe 3935.00

Two cards not due until in Feb 07 owe 1180.00 and 3101.00

One in April 07 owe 219.23...

I also have a car payment of 281.87 for 1 more year. I owe 6000.00 more luckily at 0% interest (promotion for suzuki)
I have not had any problems paying all these bills, just have never had more than 2000.00 in credit card debt.

Ironicly, we have enough savings to pay off all cards and car in full.

I guess I need my head examined, right?

**Dedlered** · 03-05-2006, 04:39 PM

Our property tax comes out of our escrow account in our mortgage payment
but *sigh* it's still 4200 a year

**halloweenfreak** · 03-05-2006, 04:53 PM

my goodness! i just checked our acct. and our last payment was 460. what decides how much property taxes you have to pay?

**chatterweb** · 03-05-2006, 04:58 PM

The home we bought was 399K, granted we put 100K down, but, we pay for the school taxes, sewer etc... so it comes out to 4200
and that was not including supplimental taxes. But, that is a one time thing.

I found a great condo for 319K, same size as our home, and we could lose 100K of our mortgage, but, it is hard to move from a home with a pool/spa to a condo, I think we would hate it.

**halloweenfreak** · 03-05-2006, 05:16 PM

i couldn't imagine 399k homes! i will never complain about living in small town oklahoma again! our home was 40k, i cant remember how many sq. feet tho. but its a 3 bedroom, 2 bath, garage and sunroom so its not a tiny house.

**chatterweb** · 03-06-2006, 01:58 AM

Still not sure how to pay our property tax, maybe the taxman will have an answer.
It must be paid soon, so whatever way it is paid really won't have much affect, less savings or more debt at zero interest, at least if we use cards, we will earn more interest on the savings intact!

**FrugalMomof3** · 03-06-2006, 07:41 AM

Our taxes are about $2000 a year minus a couple buxks but that's taken right from our mortgage payment each month.

Chatterweb - Where is the house you have for rent at? Tell me more, just PM me.

guest7 · 03-06-2006, 08:11 AM

Chatterweb. make it your business that the account with the tax payment in it- shall NOT be used for anything- other than the tax bill. It shouldn't be your emergency fund. Put it in a place that is not easily accessible. It appears that you are now a landlord. That's a business. Run your finances like a successful business.

I would use your savings to pay the taxes. That's why you were saving. Don't be fooled by the 0% interest stuff. You need to get away from debt, regardless of the 'free-loan' perception. Your car is probably an acceptable debt- and at 0% I'm jealous!

As from your experience, you just never know what could happen and if you'd loose your job - so why have debt to bring you down?

Hey! How in heck did you get 2 large mortgages making $20 hour!??
I sure hope that is feasble for you to pay back. Especially since there are no renters.

guest7 · 03-06-2006, 08:18 AM

Originally posted by halloweenfreak
i couldn't imagine 399k homes! i will never complain about living in small town oklahoma again! our home was 40k, i cant remember how many sq. feet tho. but its a 3 bedroom, 2 bath, garage and sunroom so its not a tiny house.

It is amazing what house prices are. Here in the burbs of Boston the avg house is $350K. I bought this house 10 years ago for $160K and now it would sell for $350K quickly. $400K slowly. Expenses are higher- so is the income Our income is $180K and that puts us in the high middle class here. Would put us in higher class in the south.

It's all relevant to the socioeconomic conditions of the area. I make $45 hr as a nurse- but if I were to move south, I would make $20/hr.

I pay $35K year for college for each child. Heating $500/mo. It's all relevant.

**mom22grls** · 03-06-2006, 08:22 AM

Originally posted by frugalfanny
Hey! How in heck did you get 2 large mortgages making $20 hour!??
I sure hope that is feasble for you to pay back. Especially since there are no renters.

That's what I was thinking. Holy COW! Hon, your $300K mortgage alone takes up more than half his pay.......if you got good interest rate. If he makes 50K a year with overtime, that doesn't even give you enough for the debt ratio for that first mortgage.

I'd use the savings for the tax bill & start taking it out monthly. It's hard, I know...that's how we do it, too. My taxes are $2k a year plus insurance. We take out 165 for taxes and 40 for insurance. It takes dicipline & it's no fun when there's a way cool thing you'd want to buy & have all this money sitting in an account and you can't spend it.

On dh's income, that wil be difficult, but hopefully you'll get some renters in there soon & things will start to look up.

Also, if you've got enough savings to cover the ccard debt, IMO, I think you should get rid of it. You're walking a tight rope & I'd be afraid to be stuck with those payments monthly when they do come due.

I've been in major ccard debt before & it took us 5 years to dig out. I've been right there with ya. I don't want to go back.

**juliek** · 03-06-2006, 08:34 AM

Originally posted by chatterweb
Thanks for the advice! We should be saving $350 each month for taxes, and we will...*sigh*
$300.00 auto transfers to the savings but lately I transfer it back..

DH just spent close to 500 in cash for a snowboarding trip. He got paid vacation time, but, he really needs to forget about trips now, and he is. So, I guess it is good he is working with me.

He also makes 20 an hour which helps and he works overtime too.

Right now it is the second home eating us alive! But, it is an investment and we have only been paying the mortgage 4 months so far...
We are impounded for that mortgage at least...It is our own fault, we were contemplating moving there because it is cheaper...wasted 3 months not having it listed for rent...anyways
I put the cards away so we can't use them...
We have 4 credit cards all at zero percent interest as late as April of next year:
And I keep getting more offers sooo tempting to keep transferring the balance for free...
1. 0% expires this July owe 3935.00

Two cards not due until in Feb 07 owe 1180.00 and 3101.00

One in April 07 owe 219.23...

I also have a car payment of 281.87 for 1 more year. I owe 6000.00 more luckily at 0% interest (promotion for suzuki)
I have not had any problems paying all these bills, just have never had more than 2000.00 in credit card debt.

Ironicly, we have enough savings to pay off all cards and car in full.

I guess I need my head examined, right?

If I am reading this correctly, you have $14,435 in savings. There's your answer about how to pay the property taxes! Personally, I would also pull out enough to pay off the cards, and then throw all the payments at the car to get it paid off ASAP.

I know those 0% deals sound good ~ thinking, "I'll just leave them there until they are due and then pay them off with my savings." Then, oops, you start to pile up a little more in balances than you have in savings. Then "something" happens and you need some of your savings for other expenses. Then, before you know it, you're $20,000 in debt, and it's no longer sitting at 0%.

Been there, done that, know all too well how it happens.

Pay the property taxes, set aside the money for next year (in an account you will not touch), and then pay off everything else you can while leaving a small cushion in savings. Don't play the 0% card game, because it WILL come back to bite you eventually.

**juliek** · 03-06-2006, 08:39 AM

Oh, wow, I didn't even read closely enough to do the math on $20/hour and those HUGE mortgages. Eek!

My DH makes a little more than that (but I am a SAHM). When we were house-hunting a few years ago, the MAX anyone could qualify for was 2.5 times their annual gross income. So that would be about $100,000 ~ and yours is triple that, PLUS the other place?

{HUGS} You must be under an insane amount of stress!