Understanding Supplemental Property Taxes in California – A Must-Know for Buyers!

Hey everyone, I am back with my blog! I know you look forward to this, and I hope it is an exciting read. Today, we’re tackling a hot topic: supplemental property taxes in California. My team and I get 2-3 monthly calls about this, and I think this is something we do a better job of tag-teaming with our buyers!

Here’s the deal: Many of our clients choose to impose their property taxes, meaning the lender collects a portion of each mortgage payment to cover taxes later. It sounds simple, but here’s where it gets tricky. Counties often delay adjusting tax bills, and servicing companies (who manage the loan) sometimes adjust your impound account before those supplemental taxes arrive. This can lead to a refund check being sent to the buyer or your monthly payment dropping because the servicer thinks they’ve collected enough. Sounds great, right? Lower payments!

But here’s the catch: When those delayed supplemental taxes finally show up, the impound account might not have enough to cover them. Why? That’s when we get the call: “Why am I short on my taxes?” The servicer then realizes the impound collections are too low as new tax bills roll in, and they raise the buyer’s payment to catch up. Borrowers get frustrated, but here’s the kicker - we explained this possibility upfront! The county’s slow process throws everything off, and we’re left picking up the pieces.

For example, earlier this year, a client bought a house that was assessed at $135,000, but the buyer paid $1.65 million. The servicer adjusted the impound account, and their monthly payment dropped by $1,500 - a nice bonus, right? Then, a $12,800 supplemental tax bill hit. Now, the bank wants to raise the payment by $2500 monthly until the impound account has enough money in it. This buyer did not remember the check he received from the lender, which he thought was just a gift from the Gods. We’re in the tech era, but the county is stuck in the 1960s,

What This Means for Buyers

Agents, please tell your clients this can happen! Expect supplemental taxes when buying a home, especially at a higher value than the county’s assessment. These adjust your property’s taxable value to match the sale price, and delays can create this refund-then-bill cycle. Educate your buyers upfront so they’re prepared - not surprised - when payments shift.

Let’s work together to set expectations right. If you’ve got questions or clients in this boat, give me a shout - I’m here to help navigate this mess!

Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…

Interest Rates

Rates are in the same range as we wait for something historic to happen and push rates lower. It could be some time at this pace. Low inflation, poor but survivable economy, and a lot of instability keep rates higher than they should be.

Loan Programs

• We do loans on Non-warrantable condos!
• We offer 12-day escrows for pre-approved buyers - Conventional/FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the high 5’s and low 6’s.
• Conventional loans up to $806,500 are in the mid 6s.
• High Balance Loans from $806,501 to $1,209,750 are also in the 6’s.
• Jumbo loans above $1,209,750 are in the 6’s and 7’s.
• Bank statement loans are available with 10% down again, with larger down payments in the 6’s ++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No Ratio Loans require 30% down.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:** – Nothing new!

Friendly Village: All condos are good to go except #5! So 12 out of 13 is not a bad number! Repairs have been made, and I assume #5 is not far behind!

**Bad News for Condos***

Nothing this week!  

The full state of California naughty list has been added to MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

Have a great day, and an even better tomorrow! Please call me when you have a client who needs to borrow!