Homestead exemption is a legal regime designed to protect the value of the homes of residents from property taxes, creditors, and circumstances arising from the death of the homeowner spouse(Wikipedia: Homestead Exemption).

Moving into your new home can be so exciting, and you don't want to have your day or year ruined by an unexpected change in your escrowed mortgage payment. 

An EXPECTED increase is one thing.

An UNEXPECTED increase is death.

Here are some reasons why your taxes may be a little off in the beginning:

1.  The previous owners lived at the house for over 3 years.  This means the bill has been increasing say only 3% a year, whereas the appreciation of the house might have outpaced that. Once your new sales price is recorded, BAMMMM new tax bill.

2.  The previous owners owned the home, but didn't live in it. Depending on when you purchase, it may be too late to file a homestead exemption with the title company for that calendar year. In this instance, when you do file that homestead exemption in the following year, your taxes should go down considerably.

3.  New construction. Your taxes will start off dirt cheap, seeing as the land and true value of the house has never been accessed. Once it is though BAMMM.

So make sure your loan officer and real estate agent are on the same page. Loan officers, be sure to ask your often more educated in tax info realtors to clue you in so you can add value to the customer while discussing the payment today and in the years to come.

Happy Holidays.