Tax Lien Auctions – A Homeowner’s Nightmare Article

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Tax Lien Auctions – A Homeowner’s Nightmare

No one wants their home to end up being sold at tax lien auctions. Here’s how to manage your finances so it doesn’t happen to you.

Author: Anna Woodward

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If the property taxes due and payable on a house are delinquent, the home may end up being sold at tax lien auctions. The nation’s economic picture is less rosy than it’s been in years and with this troubled financial picture comes problems for many householders. Falling behind in monthly bill payments and unable to pay taxes can create nightmares for the struggling homeowner. Here are some steps to take so that it doesn’t happen to you:

- When taking out a mortgage on a home, make certain to have a monthly payment that is called “PITI”. This stands for “payment includes taxes and insurance.” Some mortgage holders may think they’d rather have a lower payment and just pay taxes themselves, but this takes a good deal of self discipline. A mortgage company will hold the pro-rated amounts for each of these expenses in an escrow account. When the insurance and property tax bills are due, the note holder will pay the bills. No worries for the homeowner.

- If you already hold a mortgage that wasn’t set up with “PITI”, it is important to make your own holding fund. Don’t just plan to pay the substantial chunk annually; it’s too easy to be caught unprepared. Divide the annual payment by twelve and have that much deducted from your paycheck and automatically deposited into a savings account. When the bill arrives each year, you’ll be glad you thought ahead.

- If a home is owned free and clear, the owner should follow the above step, as well. Just because there is no monthly mortgage payment doesn’t mean there will be lots of money available for the large yearly bill. Plan ahead to protect your investment. A paid off house is a huge asset and well worth a bit of forethought to protect.

- The annual bill may also be paid in two increments, usually in November and March. There is usually no interest due if the two halves are paid in a timely manner.

- Make certain that the tax collectors have your correct mailing address. If the bills go to an incorrect address, they will not be forwarded and the property owner may forget about the due dates. The county assessor’s office allows citizens to update their contact information via the internet.

- Live within your means or below it, if possible. In order to have solid financial footing, credit cards must be avoided whenever possible and ample savings should be built up. One of the best ways to accumulate adequate savings is by having even a small amount of cash automatically deposited from each paycheck. This is true for a personal escrow account and a general emergency fund, as well. Giving oneself incentives and rewards when certain savings goals are met is a good way to keep the bank account multiplying.

Follow the above steps to keep your finances in the black and your home away from tax lien auctions.

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