if you were to buy a house and close in august and escrow your taxes, how many months would you have to pay?

Question

i heard that the amount of months deviates depending on what month you close in relation to November. my parents bought a house in April and they escrowed taxes and they had to pay 7 mos. in advance at closing. so if you close in August, how many months is it? thanks a lot

Answer 1

The amount the bank will ask to escrow will depend on state and also county, as in different counties there may be a different schedule for real estate tax payments. The banks are also allowed to have 2 months of "cushion". So basically they will collect amount so they have enough to pay when the payment is due plus 2 months.
Say, in your state the taxes are due twice a year, say June 1st and September 1st. The bank will want to collect enough so by the September 1st they will have enough to pay and 2 months left. So, if someone is closing in April they will want 9 months worth of taxes. After that they collect monthly, so on June 1st they will have 9+2-6 (June 1st Payment) = 5 months left, and after September 1st payment they will have 2 months left of taxes.
Per this example, in August they will probably want 2 months worth of taxes + the current tax due will be paid at closing. But again it depends on your county as when they collect taxes.
In all of Illinois the taxes are Due on June 1st and September 1st, but in Cook County Illinois it's Mid February and Mid September or sometimes even October 1st. This is just an example that things could be different between counties.

Answer 2

it depends on when taxes are due and how often they are paid (annually, semi-anmually etc) in your county. if taxes are due in November and you close in August 1 of 2 things will happen.
1) You (or the Seller) will have to pay taxes on the HUD and only escrow about 2-3 months
or
2) they will escrow more and pay taxes when they are due in November.

In Ohio, taxes are paid semi-annually. In this example, we'll use Jan/June. This is what we would do if you were to close in August. The lender would instruct the title company to collect about 9-10 months (that's enough to pay 6 months of taxes plus have a cushion in your account).
Remember-the lender is the one who give instructions to the title company, they just don't pull these numbers out of nowhere, like most people think

Answer 3

10

Answer 4

It all depends on how you pay your property taxes in your state. In most states property taxes are paid in arrears which means when you pay your property taxes you're actually paying for the taxes that accrued last year.
So generally speaking, if you closed in August the current year's taxes would be prorated and the buyer would be responsible for the day after closing till the end of the year. The seller is responsible for the current year's taxes and the previous year's taxes that have not been paid up to and including the day of closing.

Answer 5

Depends on when your taxes are due and when you close.
The lender needs to hold enough money in the escrow to pay the taxes when due. They will hold in reserve the amount needed to be added to the monthly escrow payment to be able to pay the taxes when they come due.

Answer 6

There's no single answer to that - it depends on when the property taxes are due, and that varies from area to area.

You realtor should be able to help you get an answer.