Strategy 104 of 107 · new for the five-year plan
Disabled veterans: a full or partial property tax exemption
What it is
Many states exempt some or all property tax for disabled veterans; in Texas, a 100% disabled rating exempts the whole homestead.
Steps
- Many states exempt some or all property tax for disabled veterans; in Texas, a 100% disabled rating exempts the whole homestead.
- File with your county appraisal or tax office.
- Send the escrow reduction to principal.
Repeat: Once, then renew as required.
Measure: Monthly escrow reduction.
Try it in the calculator Enter its amount in "Monthly non-income amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- Rules differ by state; some only cover part of the value.
Who it fits
Average household, Married couples, Single, Grandmas and grandpas (62 and over), No high school diploma, No college degree
Needs
Veteran with a disability rating
How predictable
Most predictable: once in place, the payoff date is arithmetic
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (average household). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.
They follow the steps: many states exempt some or all property tax for disabled veterans; in Texas, a 100% disabled rating exempts the whole homestead.
Suppose it brings $2,000 a month on principal from this strategy, not from the paycheck. The loan would be paid off in 8 years 4 months instead of 30 years, saving about $293,382 in interest. To finish in five years, they would still need about $1,974 a month more from other strategies. That is why the five-year sequences stack several at once.
The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.
Sources and more information
- Texas Comptroller: 100 percent disabled veteran exemption FAQ (one state's rule) comptroller.texas.gov
Where to get help
- CFPB: Find a HUD-approved housing counselor (free or low cost) consumerfinance.gov
- IRS: Free tax preparation for qualifying taxpayers (VITA and TCE) irs.gov
- CFPB: Submit a complaint about a lender or servicer consumerfinance.gov
Related strategies
- 103. Cancel add-on products you don't need
- 105. On a five-year plan, put cash on principal instead of buying points
- 102. Wind-mitigation and FORTIFIED roof discounts
- 101. Get out of required flood insurance with a FEMA map amendment
- 100. Free early childhood programs instead of paid daycare
- 99. Children's coverage through CHIP or Medicaid