Thousands of El Paso County homeowners don’t have mortgages on their homes, which means they pay their own property taxes and also likely have more spendable income \u2014\u00a0which might\u00a0provide a boost for area retailers, an expert said.<\/p>\n

The fact that\u00a0many El Pasoans don’t have a mortgage came to light in the past few\u00a0weeks\u00a0as several hundred homeowners\u00a0rushed to the city’s Consolidated Tax Office in Downtown El Paso to pay their 2016 property taxes by the Jan. 31 payment deadline.<\/p>\n

The U.S. Census Bureau estimates that\u00a0almost 42 percent of El Paso County, owner-occupied homes had no mortgages in 2015\u00a0\u2014 well above\u00a0the nationwide\u00a0rate of 35 percent, according to the agency’s latest data.<\/p>\n

Tax office data, as of Jan. 31, show 2016 taxes\u00a0on 100,115 properties in El Paso County were paid\u00a0by mortgage companies\u00a0via the owners’\u00a0escrow accounts.\u00a0Most of those likely are single-family homes, said\u00a0Maria Pasillas, tax assessor-collector, who manages the office. It\u00a0collects property taxes for 39 taxing agencies, including the city, school districts\u00a0and University Medical Center of El Paso.<\/p>\n

It’s likely just under\u00a0half of the 210,186 single-family homes sent tax notices in 2016\u00a0have a mortgage, the tax office data indicate.<\/p>\n

That means just more than\u00a0half of those\u00a0single-family homes sent tax notices in El Paso County in 2016 likely have no mortgages and the homeowners likely pay\u00a0the\u00a0property taxes themselves, the data indicate.\u00a0The tax office doesn’t track exactly how many of the single-family homes have a mortgage and exactly how many homeowners pay their own property taxes.<\/p>\n

George Cordova, 75, who was at the city tax office Tuesday to meet the tax payment deadline to avoid penalties, said he’s been paying property taxes on his own for about\u00a040\u00a0years because he paid off his home mortgage around 1975.<\/p>\n

“If you have no mortgage, you can use the (extra) money to go on vacation, play golf. It does help me out,” said Cordova, a retired city Streets and Maintenance Department worker.<\/p>\n

Tom Fullerton, an economics professor at the University of Texas at El Paso, said having a lot of homeowners without mortgages\u00a0who no longer are making\u00a0interest and principal payments on home loans\u00a0“probably helps local business conditions.”<\/p>\n

“It frees up more disposable income” and that helps retail stores the most, he said. That\u00a0positive effect on the local economy also assumes that most of El Paso’s home mortgages are financed and serviced by out-of-town companies, which would get most of the mortgage revenues, he said.<\/p>\n

Harold Hahn, chief executive officer of Rocky Mountain Mortgage, a large El Paso home mortgage company, said paying off a mortgage as soon as possible isn’t good for his business, “but it’s good for the homeowner,” who then has income freed up for other things, he said.\u00a0Just putting an extra $100 per month toward principal on a mortgage loan will greatly speed up the payoff time, he noted.<\/p>\n

UTEP’s Fullerton said El Paso County has a larger\u00a0percentage of homes without a mortgage than the national rate\u00a0due\u00a0to several factors, including that El Paso is an area where “people really put down roots” and don’t relocate to other cities as much as in other large metro areas, he said.\u00a0Living in the same house for a long period makes it easier to pay off the mortgage, he said.<\/p>\n

Homes\u00a0cost less in El Paso compared to many other large metro areas, also\u00a0making it easier to pay off a mortgage, Fullerton said.<\/p>\n

Texas law also doesn’t\u00a0allow for the many exotic-type mortgage loans that got many homeowners into financial trouble during the housing bust about 10 years ago, Fullerton said. Some of those mortgages included ones\u00a0allowing a\u00a0homeowner to make interest-only payments in the first few years of a loan. But the loan payments increased\u00a0significantly in subsequent\u00a0years, making payments more difficult to pay.<\/p>\n

Cordova, who owns a home in the Ascarate Park area, fits\u00a0the entrenched El Paso homeowner profile Fullerton described.<\/p>\n

Cordova and\u00a0his wife thought about buying a different home over the years, but found no reason to move, Cordova said.<\/p>\n

“We know everyone in the neighborhood. We feel comfortable,” he said.<\/p>\n

Hahn, the Rocky Mountain Mortgage CEO,\u00a0said most people paying their own property taxes probably have paid off their mortgages.\u00a0Some of those might\u00a0be people who refinanced their homes in the low-interest climate of recent years to a 15-year mortgage, which obviously is\u00a0paid off quicker than a standard 30-year mortgage, he said.<\/p>\n

It also could include some people who opted out of having a mortgage company pay their taxes through an escrow account, Hahn\u00a0said.<\/p>\n

That number is probably small, he said,\u00a0because that usually requires\u00a0the buyer getting\u00a0a conventional home loan, making\u00a0a down payment of\u00a020 percent or more of the sales price, which\u00a0on a $130,000 home, for example, would be at least $26,000, and meeting other financial requirements. The mortgage company also would ascertain\u00a0the buyers’ ability to pay their own property taxes without the discipline of an escrow account, Hahn said.<\/p>\n

A homeowner also could later ask to opt out of an escrow account after at least 20 percent of a home is paid off and other financial requirements are met, he said.<\/p>\n

At Rocky Mountain Mortgage, 60 percent or more of its home loans are backed by the Federal Housing Administration or the U.S. Department of Veterans Affairs, which require\u00a0escrow accounts to pay taxes and insurance, Hahn said.<\/p>\n

Paying a property tax bill without an escrow account can be difficult as El Paso’s rising property taxes and a home’s rising valuation increase\u00a0the annual tax bill, he said.<\/p>\n

“From a budgeting standpoint, people can do one-twelfth\u00a0of that (each month) through their mortgage payments,” Hahn said.<\/p>\n

Fullerton said he periodically talks to people who have run into problems with their property taxes because, he said, they didn’t budget properly to pay the taxes on time.<\/p>\n

Cordova said he has enough retirement income to keep money in the bank to pay his property taxes without problems. He pays in four quarterly installments, something allowed for qualified owners who are at least age 65\u00a0or disabled military\u00a0veterans and surviving spouses of those veterans.<\/p>\n

About 2.5 percent of all property tax bills, not just for homes, in El Paso County are delinquent annually, an annual average that’s held stable in the past several years, said Pasillas, the tax office director. No delinquency data was available for homes only.<\/p>\n

Irma Lopez, a city spokeswoman, said the delinquent taxes are at a level city officials are able to account for in the city’s\u00a0annual budget without problems.<\/p>\n

Sixty-four percent of the city’s property tax revenues go to its general fund, which pays for city operations,\u00a0city data show. The other 36 percent of the city’s\u00a0property tax revenues go to pay for costs of its\u00a0bonds and other debts.<\/p>\n

Other\u00a0taxing agencies also rely heavily on property tax revenues, including school districts, El Paso County\u00a0and University Medical Center.<\/p>\n

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