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How do property taxes work when refinancing?

By Bob Millaway, South Jersey Community Expert & REALTOR®

When you refinance, your new lender typically requires a new escrow account for property taxes. The old lender will release the remaining escrow balance to you or the new lender. Your new monthly payment is recalculated based on current taxes. If you have paid taxes ahead, you may receive a refund from the old lender for the prepaid portion.

Why It Matters

Refinancing resets your tax escrow, which can affect your monthly payment. Understanding the process helps you avoid double payments or escrow shortages.

Related Questions

How are property taxes calculated in New Jersey? How do I appeal my property tax assessment? What is the NJ annual property tax deduction? What is a tax assessment and how often is it done? How do property taxes affect my monthly mortgage payment?

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