If you are looking at financing a property to rent out, there is no better place to start than with residential property tax loans. Low interest rates and a stable real estate market have made this an attractive deal for many borrowers. Here’s what you need to know about getting underway with this type of loan.
What is a property tax loan?
A property tax loan is a way to pay your property taxes without having to pay them all at once. You can borrow money from a lender and then make monthly payments until that money has been paid off.
It can be an excellent way to get loans when you need them most: when you’re facing large payments or unexpected expenses. It can also be helpful if your income fluctuates from year to year, making it hard to budget for large payments like property taxes.
Why would I want one?
If there’s one thing that can really throw off your budget, it’s paying your property taxes in one lump sum every year. You might not even have enough cash on hand to cover them all at once, which means you’ll either have to take out another loan or go into debt with credit cards or other loans just so you can pay them off before they come due again next year!
How it works
You buy your new property and find tenants who want to rent it from you. You give them their deposit and first month’s rent (usually two months’ worth) at closing and then make monthly payments directly to the lender, who distributes them among themselves according to how much they own. When the year is up, all of the owners have paid off their loans in full (including interest), and each owner gets a check for any amounts left over.
To sum it up, while getting started with property tax loans can be a little more involved than a bank loan or a conventional mortgage, the potential rewards make it worth the effort. These loans usually carry lower interest rates and shorter term lengths, so you could potentially put your money to better use. The best part is that these loans are a viable option year-round, not just during certain tax seasons. So if you think a property tax loan might be right for you, contact us today!
Monica Davis, Operations Manager for Home Savers Community Group. Specializing in assisting property owners with saving their home with a property tax loan.