topic Re: VA Loan Tax Exempt in Mortgage Loans

VA Loan Tax Exempt

Anonymous — Fri, 30 Nov 2018 19:49:23 GMT

Im getting close to closing on my new home. Im 100% disabled vet and my Oklahoma property taxes are exempt. The mortgage company still has to include the property taxes in closing, because its the way it is.. My question is, after I close and I file my property tax exemtion with the county and turn over the paperwork to the finance company showing im property tax exexmpt, do they redo my loan papers and remove the property tax charge on my bill? Or do I have to keep paying property taxes every month and file a return at the end of the year? How do i go about getting the tax portion of my mortgage payment removed after i close?

Re: VA Loan Tax Exempt

Medic981 — Fri, 30 Nov 2018 19:56:10 GMT

That is a question I would ask the Oklahoma State Tax Commission. I am surprised that your loan originator does not know about this situation.

Re: VA Loan Tax Exempt

Anonymous — Fri, 30 Nov 2018 20:11:59 GMT

Ive asked him. He kind of mumbles around and mentions the underwriter fee is $900.00 and he is trying to get my rate down and when we close we will need to see what credits are left and mentions the underwriter during closing. I think he is a really good LO. Usually when i dont understand why he does something, i research it and then it makes more sense why he did it that way so i try not to ask repetitive questions when he mumbles around. Also there's not a plethora of vets who are tax exempt, so Im not sure its something they deal with on a daily basis with VA loans. He may be trying to rat hole money to buy my rates down or something like that. I cant hardly hear so trying to understand what people are saying when they use industry specific terms makes it harder to follow whats being said and I get tired of saying hu? what?

Re: VA Loan Tax Exempt

Anonymous — Fri, 30 Nov 2018 21:27:43 GMT

I found this after searching for an answer for a couple of months.

Removing Property Taxes From Escrow Account

First of all, this may not always be the case. Our experience is that an application for a property tax exemption may not be approved until the qualified Veteran owns the home. Someone typically cannot apply for an exemption until they are a homeowner. Someone can’t apply for an exemption on another person’s property. Therefore, when purchasing a home, the property taxes will be charged at closing. Furthermore, if the buyer obtains a mortgage with an escrow account, the taxes will need to be included in the payment.

Once the veteran is a homeowner, the exemption application, and supporting documentation must be provided to the county and possibly local entity. If an exemption or discount is approved, give this documentation to the mortgage servicer’s escrow department. Request a review and amendment to remove or lower the property tax amount in the escrow account. Keep in mind, that this is a special request and some lenders may not consider the change until their standard annual review. Although, a Veteran should push for this immediate change.

In review, the process for removing property taxes from a mortgage payment would look like this:

Discuss requirements and possible qualification with county up-front
Home purchase closing takes place
Complete exemption or discount paperwork
If approved, contact escrow department for the mortgage servicer
Ask for a review and amendment to your escrow account. Request removal of property tax from the payment
Provide documentation to the escrow department

Re: VA Loan Tax Exempt

JVille — Sat, 01 Dec 2018 01:54:14 GMT

JesseJay is exactly right! You will need to pay into your Escrow Account for taxes UNTIL your tax exemption is approved. You can’t apply until you own the home.

Re: VA Loan Tax Exempt

Anonymous — Sat, 01 Dec 2018 02:40:01 GMT

I hope i am able to get the property tax removed quickly. No telling when the annual review is.

Re: VA Loan Tax Exempt

JVille — Sat, 01 Dec 2018 02:42:06 GMT

Get all the paperwork ready to go and submit the day after you own the house.

Re: VA Loan Tax Exempt

VALoanMaster — Mon, 03 Dec 2018 16:48:49 GMT

Hi JesseJay,

I work with a lot of disabled Veterans all over the country & several states like OK , TX, FL & IL have tax exemption programs for disabled Veterans depending on the percentage of disability.

The way I've been able to help Veterans with this is to have all of the paperwork for the exemption completed at closing & filed right away. This "allowed" me to not only not collect the taxes at closing but to also exclude the property taxes from the debt to income ratios.

Unfortunately what has happened in some cases (people working with other lenders) is Veterans either don't file the paperwork or they don't qualify for the exemption. What happens in these cases is the servicer gets a tax bill & because they weren't collecting taxes, you end up with an escrow deficiency. When this happens, the servicer will pay the tax bill & adjust your escrow calculations (increasing your payment) to not only pay back the tax bill they paid but to also ensure they have enough in the escrow account to pay the tax bill next year. For example.

Let's say your taxes run $3,624 per year. In order to pay that back & ensure you have $3,624 next year, your payment will go up by $604 per month! ($3,624 X 2 = $7,248 / 12 months =$604)

Most

people cannot survive a $604 increase in their mortgage payment. This is why a lot of the investors that we (lenders) sell our loans to require the escrow of taxes upfront.

When you file f

or the exemption & it get's approved, you'll send a copy it to the servicer & they will adjust your payment down.

Does that make sense?

Re: VA Loan Tax Exempt

Anonymous — Mon, 03 Dec 2018 18:37:42 GMT

Yes it does and I hope things go that smoothly. I hope i dont have to wait for an annual review or whatever for the servicer to remove the taxes. I was afraid that there would be some little rule where i had to refinance the loan once the property was in my name to get the taxes removed from my payments, so im glad i dont have to deal with that.. I'm getting down to that last week or two before closing and the stress factor is starting to kick in. Just waiting on the appraiser to send in his paperwork. Thanks for replying. Have you ever had anyone who had to wait for an annual review before they removed the taxes from the loan payments?

Re: VA Loan Tax Exempt

Anonymous — Mon, 03 Dec 2018 18:51:09 GMT

I am except for this also in Illinois. I closed on my home in May and will be responsable for paying for the taxes from May to the end of the tax year and will file for the exemption for next years tax year. Here in Illinois, you have to own the own on Jan 1st to qualify. My lender explained it to me as they did above. They do not write it into the loan as expempt because there is no guarentee that you will actually submit the exemption paperwork.

Re: VA Loan Tax Exempt

Anonymous — Thu, 06 Dec 2018 05:15:00 GMT

I close in 5 days so luckily I should make it by the first of the year. The way my loan officer thinks it will work is I should be able to get my payments adjusted for being tax exempt as soon as i get the paperwork in, but it could take until the servicers annual review to get any funds back that were paid into escrow for the property taxes. I just have to wait and see. I didnt go through a veterans mortgage company and im not around a big base so they haven't done a lot of va loans with property tax exemptions. Right now everything is done. Im just waiting to close. Hurry up and wait.

Re: VA Loan Tax Exempt

Anonymous — Fri, 07 Dec 2018 00:29:44 GMT

Last minute nightmare with 4 days to close. My loan had passed everything and not only was i waiting to close, but i was going to get money back. Then before I could wake up, I get a call from the LO. The title company had found a tax lien from 1998. What really disgusts me is in 2010 I got all my taxes caught up. I called the state tax commission and they sent all the tax info to get everything filed.. I think i even got a small refund. Thats enough to make you stroke out first thing in the morning. I called The tax commission and they gave me the amount and are printing a summary of what I owe. I should get that tomorrow. I was relieved i was able to get a hold of them so easy and get the information i needed. If they get me the bill tomorrow morning then I should still close on time with a lot less money. Now I just have to keep from stroking out.

Re: VA Loan Tax Exempt

Anonymous — Wed, 12 Dec 2018 03:15:10 GMT

Closed. Finally. I go a lot of really good information from this board. I finally stressed completely out after tax lien mess but everything has been taken care of. Im not sure i want to go back through that again for a long time.

Re: VA Loan Tax Exempt

JVille — Wed, 12 Dec 2018 05:28:25 GMT

Congratulations 🎉🎈 and next time all this will be behind you and so so much easier!

Re: VA Loan Tax Exempt

Anonymous — Wed, 12 Dec 2018 18:15:58 GMT

Thanks jville. This has been an exciting and stressed out year. It started with stressing out over my va disability rating. Then double stress getting 150 grand worth of student loans discharged. Finally a triple stressor buying this house. The house was at least 20k under priced. I needed to get it closed. After the first of the year things pick back up. Im starting to recover a little now. Just in time to start moving.

Re: VA Loan Tax Exempt

Anonymous — Sun, 06 Jan 2019 00:33:38 GMT

Update on the property tax exemption.

It took a couple of weeks for the deed to get to the courthouse and entered into the system. It only took about 10 minutes to get my property tax exemption approved. About the same time, I got a letter from my mortgage lender that they had sold my loan to Wells Fargo and after i made my first payment to the mortgage company i was suppose to get a coupon book from Wells Fargo. Then i was suppose to turn in my papers to have the property tax exempt from my loan payment. After a week or so I decided to call Wells fargo to see if I could speed up the process. I was happy to find out they already had me in their system. They had me fax in the tax exemption papers and request a review of the escrow line. They said everything should be taken care of by next week and my payments adjusted. It may take a little over a week to get my pre paid taxes from the escrow account back. Thats several months faster than i expected and a big relief that Wells Fargo had everything in place to get it done that quick.

Re: VA Loan Tax Exempt

Anonymous — Wed, 06 Mar 2019 17:52:44 GMT

Just curious, was the property you purchased in the same county as the lien?

@Anonymous wrote:
Last minute nightmare with 4 days to close. My loan had passed everything and not only was i waiting to close, but i was going to get money back. Then before I could wake up, I get a call from the LO. The title company had found a tax lien from 1998. What really disgusts me is in 2010 I got all my taxes caught up. I called the state tax commission and they sent all the tax info to get everything filed.. I think i even got a small refund. Thats enough to make you stroke out first thing in the morning. I called The tax commission and they gave me the amount and are printing a summary of what I owe. I should get that tomorrow. I was relieved i was able to get a hold of them so easy and get the information i needed. If they get me the bill tomorrow morning then I should still close on time with a lot less money. Now I just have to keep from stroking out.

Re: VA Loan Tax Exempt

Anonymous — Wed, 27 Mar 2019 03:37:34 GMT

No it wasnt but it was a state tax lien. No way to escape that one, unless I took it to court. I was too close to closing on my home to do anything but panic and pay it.

Re: VA Loan Tax Exempt

Anonymous — Wed, 27 Mar 2019 03:54:13 GMT

Everything had gone smoothly and I had finally got confortable in my new home and finally started recovering from all the stress. Then i get a nasty gram from Travellers Insurance that said they have not received any money from wells fargo and I had until April to pay up or my insurance would be cancelled. Thats almost 2000 dollars. I called Wells Fargo and they said the title company should have paid it. Wells Fargo will not have enough in escrow until next year. So i call the title company. They paid the local insurance agent the day i closed. So, i called Travellers back. They had no record of any payments that were made. I talked to the local agent and they paid Travelers insurance way back in December and even had a confirmation number. So i called Travellers back. This time they wanted 200 dollars more. They could not find any information on their own confirmation number when it was paid and could not explain why they decided to up my insurance 200 bucks except to call the local agent. The local agent has no idea what happened. They are now trying to find me another insurance company. They think Travellers is acting strange and it makes them uncomfortable. Especially after saying they were not paid when they were. However, the electronic check was never cashed by travellers according to the local agent. I should have just gone a head and paid USAA their outrages premiums. Since I live in a tornado state my insurance is twice as much as a regular state. I was hoping i was past the insurance snafu for at least a year. I never even made it a week i guess.