Can someone explain what it means when your property is assessed?

@dlkuku (1936)
United States
February 4, 2008 11:48am CST
I got a statement in the mail today from the county saying my property was assessed, and they say it is now worth almost $4,000 more than it was two years ago when I bought it. Does this mean my taxes are going up? And since I have my taxes paid by my mortgage does it mean my mortgage payment is going up? Does it mean I actually have equity in my home? Or not? I don't know all the ins and outs of this stuff, so if someone can enlighten me I would be happy.
1 response
• United States
4 Feb 08
Periodically, the County in which you live reassesses your property value. Based on the the counties formula, so much goes to school districts, road maintenance, ect and for the most part taxes usually go up not down. Now, if you look at your year end report from your mortage company, it will show how much money you have in escrow to pay your taxes, insurance ect. If you had enough money to pay all these things without going into a deficit, your mortgage payment should not go up but if there's a deficit that amount will be divided by 12 and added to your payment. It has no bearing on your equity. Think about your neighbor who is paying taxes on a $80,000 home based on an assessment made 4 years ago but last year he made a major improvement to his home which cost him $40,000. When the county reassesses his home they will note the major improvement and raise the value of his property. It's just a tool to insure everybody is paying the fair value of their home.
@dlkuku (1936)
• United States
4 Feb 08
Thanks, I thought my monthly payment would go up, that happened when my insurance premium went up last year, it was only a few dollars more a month, but still... I don't understand the whole equity thing, I know that according to my year end report, the majority of my payments went to interest, and it is showing very little equity. What I am wondering, is this the real value of the home? If I decided to sell it, would this be an appropriate asking price? Not that I am looking to sell right now, I am just curious.
@dlkuku (1936)
• United States
5 Feb 08
We bought this house just two years ago, we did get an incredible buy at the time, and even though we have a 30 year mortgage, this house will be paid off in nine years if we decide to keep it. I am just glad I have a fixed rate, I was watching the news last night and they had a woman on who bought a house in Brooklyn, her yearly salary is only $38,000, but they gave her a loan anyway with an adjustable rate, now she is 2 months behind because her mortgage payment ballooned to $7,000 a month, which is ridiculous. I didn't realize how bad it was till I saw that last night. The commentary said that giving mortgages like this should be illegal, which I agree, and they also said, that it ends up bringing down the value of the property once it's in forclosure, so it's a lose/lose situation.