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Will Refinancing Affect My Property Taxes in Texas?

As a homeowner in Texas, you may choose to refinance your home for several reasons. Whether it is to lower your monthly payments, consolidate debt, speed up the process of paying off your mortgage, or put more cash in your pocket, most homeowners are looking to get the most out of their investment. But before you begin the next steps of this process, you may be wondering if refinancing your home will affect your property taxes. After all, the two can be connected when a re-appraisal is required to determine your home’s value. Keep reading to learn whether refinancing your home in Texas affects property taxes or not.

Does Refinancing Increase Property Taxes?

The simple answer to this question is no. Refinancing your mortgage does not impact your property taxes directly. When you refinance a property, the property is appraised by a private appraiser instead of the county assessing your property. Here is the difference between the two:

Property Appraisal – An appraisal is an approved valuation of how much a property is worth. This can be used by real estate agents and mortgage lenders when your home is bought, sold, or refinanced. The purpose of the appraisal is to determine a fair market value for your home, using a detailed market analysis. Since this is completed through a private business, the appraiser’s valuation will not affect how the government or county values your home.

Property Assessment – An assessment occurs when a local public official, such as the county tax appraiser, determines your home’s taxable value. The assessed value takes into consideration the quality and condition of the property, local property values, square footage, and any home improvements.

Even though refinancing does not directly impact your property taxes, if you do choose to refinance, you may need to reconsider how to budget for your property taxes. Every situation varies. However, refinancing will feel similar to when you closed your first mortgage.

Does Cash-Out Refinance Affect Property Taxes?

There are a few different ways to refinance your home. One of those being a cash-out refinance. This is when you replace your current mortgage with a newer, larger mortgage to turn your home’s equity into cash. By doing this, you will not directly impact your property taxes unless you are using the cash for a home improvement. When you choose to use the cash for a sizeable renovation, which advances or expands your home, this could create the need for a reassessment. When the county reassesses your property for the following tax year, your home’s value will increase, increasing your property taxes.

Need Help Paying Your Property Taxes?

If you are currently behind on your Texas property tax bill, Johnson & Starr can help. Our property tax loans are customized to fit your unique situation and can be flexible to adapt to nearly any loan requirement. We take pride in being a trusted Texas property tax lender that can save your home or business. To learn more about how we can help you, call us today at 888-508-3894.