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Impact of Mortgage Refinancing to Property Tax Payment

Neither Maryland State law nor Montgomery County require that property taxes be paid when refinancing a mortgage. However, often mortgage lenders will require that property taxes be current before the new mortgage is issued to the taxpayer.

In the event that the settlement payment is made prior to the mortgage lender (assuming the lender uses the mass payment option to pay taxes), then there is no need for the seller to request a refund from the County, because the money will automatically be returned to the lender. The seller will need to contact their lender for a refund.

In the event that the settlement payment is made after the mortgage lender, there may be a need for the seller to request a refund from the County. In these cases, the seller needs to provide a refund claim form, copy of their escrow analysis from the lender and the settlement HUD1 document as proof for requesting a refund. Mail refund requests to: Division of Treasury, 255 Rockville Pike, Suite L-15, Rockville, MD 20850.

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