Homeowner Year-End Checklist: Money Items and Home Upkeep

The end of the year is the easiest time to get your house in order, on paper and in the garage. This homeowner year-end checklist is the one I would walk through with a client: the money items first, because they have deadlines, then the upkeep items that keep small problems from turning into expensive ones. None of it is complicated. It just helps to do it all in one sitting.

If your lender collects your property taxes and homeowners insurance with your payment, they sit in an escrow account. Your servicer has to send you an annual escrow account statement, and under federal Regulation X it is due within 30 days after the end of the escrow account's computation year. It shows what came in, what went out, and what the servicer expects to pay next year.

This is the document that explains why your payment changed (or why it may soon). The CFPB points out that property taxes and insurance premiums can change from year to year, and your escrow payment, and with it your total monthly payment, changes accordingly. Look for three things:

When are Texas property taxes due?

In most cases, by January 31. Taxes that remain unpaid on February 1 are delinquent, and penalty and interest start that day. Your bill is mailed beginning in October.

Why did my mortgage payment change if I have a fixed-rate loan?

On a fixed-rate loan, principal and interest stay the same, but the escrow portion for taxes and insurance can change. Your annual escrow statement shows why.

Will I get a Form 1098?

You will generally receive one if you paid $600 or more of mortgage interest on a mortgage during the year, according to the IRS. Whether you can deduct the interest depends on whether you itemize, so check with a tax professional.

Should I make extra principal payments or build savings first?

I usually suggest an emergency fund first, because cash in the bank is easier to reach than equity. After that, extra principal can be a good use of money. Your goals and your other debts matter, so talk it over.