Question

A family purchased a $90,000 lot to build a custom home. At the date of closing, the lot was assessed at $84,550 and the tax rate was $1.91 / $100 assessed valuation. When they completed the home, the assessment increased by $235,000 to include the new construction. If the monthly tax escrow is based on the assessed value, what will the monthly tax escrow be?

Answer 1

Answer:

$508

Explanation:

The total assessed value of the house is $319,550 (= $84,550 + 235,000).

The annual tax rate is calculated in 100s, therefore we must divide $319,550 by $100 = 3,195.5 which will be rounded up to 3,196 100s.

Now we multiply 3,196 x $1.91 = $6,104.36

to calculate the monthly payment we divide $6,104 by 12 = $508