AUSTIN (Wilson County News) – Homeowners who fall behind on their property taxes may be tempted to take out a loan to pay off those taxes. However, the Better Business Bureau (BBB) strongly recommends doing a little homework first.
According to the BBB, the homeowner should:
• Call the taxing agency first. Most government agencies are willing to create payment plans and make other arrangements with those behind on tax payments. Certain individuals may even qualify for a property tax deferral. The homeowner should make sure every means of assistance available through the agency has been exhausted before considering a loan.
• Understand the process. A property tax loan provider will pay off the taxing entity, but that doesn’t mean taxes are paid. The tax lien simply transfers to the private lender.
• Pay attention to the terms. Find out how much, in total, the private lender will charge in interest and fees. The homeowner could end up paying more than he would have paid the taxing entity.
• Check other avenues. A property tax loan provider is not the only option. Check with banks for a lower-interest loan, or see if the balance can be paid with a credit card. The interest rate may be higher with a credit card, but the homeowner will keep the home should he default or file bankruptcy.
• Consult an attorney. A lawyer can help the homeowner negotiate with a taxing entity and understand the terms of a property tax loan, or help the homeowner decide whether or not to file bankruptcy. Texaslawhelp.org provides information to help those who cannot afford legal counsel, and can help find low-cost representation.
• Check out a lender’s BBB business review at bbb.org to see how many complaints have been filed against it before doing business. Also ensure the lender is licensed by the State of Texas.
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