I just received my property tax refund from the state of Minnesota. This year, they offered an online application option. In past years, I had to print out a form and send it in. I found the online form worked well and I did get my refund sooner than normal. I used the direct deposit option, so everything was electronic. The refund covers about 1/3 of my property tax bill. To qualify for the refund your total household income has to be less than $115,020. Household income means that you have to include the income of everyone living in your home. I had to include my girlfriend’s income (even though she doesn’t pay rent). Our combined income in 2019 was just over $78,000, so we were well under the limit. Next year won’t be a problem either, as our combined income will be much lower than that. My mortgage is now down to $380 per month. The majority of that ($280) goes to the property tax escrow. So, the property tax refund covers about 2.5 months of my current mortgage. That’s a refund you definitely want to apply for.
How did I get my mortgage payment so low? When I got the house 9 years ago, I wasn’t sure now long I would be living here, so I went with a 5 year variable rate mortgage. At the start, the interest rate was 3.125%. I was able to invest the extra money I wasn’t using for the mortgage at a higher rate. After 5 years the mortgage rate started going up by about half a percent each year. When it went above 5% I started to pay off the principal, which reduced the amount of interest I was paying each month. The original loan was for $148,000. After 7 years I still had $118,000 of the principle left. In the 8th year, I put a big chunk of the money I had invested toward the principle, and now have only $18,000 left to pay. But, now that the interest rate is back down to 3.25%, I’m in no hurry to pay off the loan. Lets just hope that the property taxes don’t go up too fast. When it comes down to it, property tax is just like paying rent (that goes up every year). Good thing Minnesota has a refund program!