As we head into the Fall season in Cook County, we can be certain of a few things: the weather will get colder and the 2nd installment of property tax bills will come out sometime in the next couple of months for all homeowners. One of the new responsibilities that a first-time homeowner needs to be mindful of is the assessment of property taxes. The property tax bill that arrives has several different terms and numbers that may be confusing if you’ve never seen them before. Here’s a quick rundown of some of the features of the bill:

Fair Cash Value and Assessed Value: “Fair Cash” value is a description of the buy/sell value of the property—what the owner can expect to receive if they were to sell their property at that moment. “Assessed” value is the value that taxation is applied to, which may only be a portion of the property.

Equalized Assessed Value: The state applies an “equalization factor” to all property taxes in order to get a single, uniform assessment, and the EAV reflects the assessed value with that factor. The EAV, multiplied by the tax rate, will produce the final amount of the bill.

Exemptions: Certain portions of the property may be considered exempt from taxation, and these will be noted in this section of the bill. There may even be considerations for which an entire property is exempted, such as church buildings.

Tax Rate: The aggregate rate of taxation is determined by adding up separate rates for different types of municipalities—for example, the bill may show an aggregate that combines rates for the city, county, and school district. This is then multiplied by the EAV to produce the tax bill.

Something to keep in mind about your property tax payments are that your lender may have already set aside money for property taxes, and will cover the payment when it comes due. You will still receive the bill, but may not have to take action—so be careful to avoid double-paying!

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In today’s lending world, credit scores cary a lot of weight. Your credit score lets lenders and other institutions know, at a glance, about your borrowing behavior and your ability to repay your debts. As a result, the score can greatly affect your choices and opportunities when it comes to purchasing a large item…such as a home. Having a good credit score can affect the size of the down payment you make, the conditions of the mortgage payment schedule, and possibly whether you are even approved for the loan at all. While you might understand the basics of a credit score—which ranges from 300 to 850—and how it can affect your buying decisions, you might not be aware of how that score is calculated.

The exact methodology of a credit score cannot legally be released to the public, but credit reporting bureaus do allow an approximate breakdown:

Payment history – 35%
This element of the credit score is given the most weight, since your payment history expresses how responsible you have been about paying bills on time. Late payments or, in worst cases, notices of collection and bankruptcy, will all lower your score. Payment history also reviews how recently certain behaviors have occurred—late bill payments will be considered more negatively when they happen more recently.

Outstanding debt – 30%
The greater your current debt—including credit cards at their limits or other monthly bills for large items—the lower your credit score will be. Having significant debt will make lenders wary of adding more.

Established credit history – 15%
Your credit score improves the longer you have had established credit. A longer history is more useful for credit reporting, since there is a larger volume of past data to use for predicting future behavior.

New credit – 10%
Receiving new credit, such as a loan or new credit card, will temporarily lower your credit score. This element of the score is also a record of inquiries into your credit rating—mortgage lenders constitute a so-called “hard inquiry” that will lower your score (as opposed to personal inquiries, which have no effect). The score does count multiple hard inquiries that occur within a brief period of time as a single inquiry, so as not to penalize loan shopping.

Types of current credit – 10%
Showing a familiarity with several different types of credit is a positive on your credit score.

Knowing this breakdown can help you strategize the best ways of keeping your score in good standing—for example, paying your bills on time and maintaining a lower total debt balance are clearly the most effective ways to improve your credit rating.

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