The window envelope comes from your Municipal Tax Assessor’s office. Your muscles tense. Your thoughts focus. Wasn’t the mortgage company suppose to handle property tax stuff? Who needs another bill. Your adrenaline has kicked in to help you face this “threat.” It sharpens your focus.
You nervously open the envelope. Its contents scream in large bold font across the top “THIS IS NOT A TAX BILL.” Relief washes over you as you put the notice down, one of the biggest mistakes that homeowners make. Because if you take the time to read and understand this form, you will reduce the amount of taxes you pay on your home for years.
Homeowners in their first year of ownership should pay particular attention. If this is the first year owning your home, then one of the most important things you can do is to make sure that your property is assessed correctly in the first year of ownership. Transfer of Ownership is a significant taxable event in Michigan. Transfer of Ownership includes not only purchases but inheritance, divorce, probate, etc.
Ignoring this can cost you thousands of dollars over the life of your homeownership. The first year of ownership is the only time your state equalized value (SEV) will be the same as your taxable value. The reset of SEV and taxable value can substantially raise a new homeowner’s property taxes during the first two years. That is called the “pop-up tax.”
You want your taxable value to start as low as possible. The only way to get it done is to appeal your property tax assessment. The good news is that it’s not hard to do. Since you just bought the house, you probably have all the documentation you need to make a strong appeal.
If you have bad credit be encouraged you can have good credit, if you want it.
Having a “prime” credit score can make a significant beneficial difference in your life. Non-prime credit scores will result in limited more expensive borrowing options, if available at all.
Borrowing from time to time is a reality and necessity of modern financial life. Short-term borrowing costs impact your long-term financial well-being. Your ability to minimize those costs is based on your financial capability. In this adversarial economic system, you can either "play the game" or "be played by the game."
Credit heals itself. If you do nothing on your credit for the next 7 years you will have a clean credit report by law. The only exception would be the 10 years required for a Chapter 7 bankruptcy to clear. But just waiting for the bad news to fall off your report isn’t good enough. You also need to engage the system for your benefit.