Buying in Downers Grove and trying to figure out what your monthly payment will really be? Property taxes are a big part of that number, especially in DuPage County. It can feel confusing at first, and you want a clear, local way to plan your budget. In this guide, you’ll learn how taxes flow into your mortgage, how to estimate the monthly impact, and what to check before you make an offer. Let’s dive in.
Property taxes in escrow
Monthly escrow basics
- Most lenders collect property taxes through an escrow account along with homeowners insurance.
- They estimate your annual tax bill, divide it by 12, and add that amount to your monthly mortgage payment.
- Under federal RESPA rules, lenders can keep a cushion of up to two months of escrow to prevent shortages.
- Lenders run an annual escrow analysis and adjust your monthly escrow if taxes change.
Why local rates vary
- Your tax bill depends on your parcel’s assessed value and the combined tax rate of all taxing districts that serve the property (school, village, county, park, library, and special districts).
- Downers Grove includes multiple school districts, which can make tax rates vary from block to block.
- Two homes with the same sale price can have different tax bills based on exemptions and district coverage.
DuPage assessment basics
- Illinois commonly uses an assessment ratio of about one-third (33.33%) of market value to set the assessed value for residential property.
- The county reports an Equalized Assessed Value (EAV) that may reflect exemptions and equalization.
- Annual property tax is generally calculated as EAV multiplied by the composite tax rate for your parcel.
Estimate your monthly impact
Use one of these two approaches to estimate your monthly escrow for taxes. These examples are illustrative only, not predictions for a specific address.
Method A: quick estimate
- Pick an effective tax rate you believe fits the area.
- Annual tax estimate = Purchase price × effective tax rate.
- Monthly portion = Annual tax estimate ÷ 12.
Example A (illustrative)
- Hypothetical price: $400,000
- Illustrative effective tax rate: 2.0%
- Annual taxes: $400,000 × 2.0% = $8,000
- Monthly tax portion: $8,000 ÷ 12 = $667
- If your annual insurance is $1,200, monthly insurance is $100. Estimated monthly escrow = $667 + $100 = $767 (plus any lender cushion).
Method B: Illinois-specific steps
- Assessed value = Market value × 33.33%.
- Subtract eligible exemptions to get your net assessed value or EAV.
- Annual tax = EAV × composite tax rate for your parcel.
- Monthly tax portion = Annual tax ÷ 12 (your lender may also collect a cushion).
Example B (illustrative, showing calculation mechanics)
- Hypothetical price: $400,000
- Assessment ratio: 33.33% → assessed value = $133,320
- Illustrative composite tax rate on EAV: 0.18
- Annual tax: $133,320 × 0.18 = $23,998
- Monthly portion: $23,998 ÷ 12 ≈ $2,000
This example highlights why you must use the county’s actual rate and confirm whether the rate applies to EAV or market value. Your lender will translate the annual figure into a monthly escrow number on your loan estimate.
Downers Grove checklist
Use this quick list before you write an offer or lock a loan:
- Get the seller’s most recent annual tax bill and any exemption documents.
- Ask for the property index number (PIN) to look up assessment and tax history.
- Confirm the parcel’s school district(s) and any recent levy changes or referenda.
- Ask your lender for an escrow estimate based on the property’s actual bill.
- Verify which exemptions apply today and whether you need to apply as the new owner.
- Budget a conservative cushion of 5–15% above last year’s bill for potential increases and escrow adjustments.
Exemptions and appeals
- Exemptions can reduce your taxable value. Common categories include homeowner (homestead), senior, and disabled person programs. Check eligibility and deadlines and apply if you qualify.
- If you believe the assessed value is too high compared to similar homes, you can pursue an assessment appeal through the county’s process. Deadlines matter, so watch the calendar.
- Keep an eye on local levy decisions, especially from school districts, since those can raise future bills.
Common pitfalls to avoid
- Relying on a countywide “typical rate” instead of the actual parcel’s bill.
- Forgetting that the seller’s exemptions may not transfer to you automatically.
- Overlooking special assessments or recent improvements that may increase the next bill.
- Assuming bills stay flat year to year.
What to ask your lender
- Will you base my escrow estimate on this address’s most recent tax bill?
- How much escrow cushion are you collecting, and when?
- If taxes rise, how will you handle a shortage next year?
- Can I see a written escrow projection on the loan estimate and closing disclosure?
Timeline and billing basics
- Many Illinois counties bill property taxes in arrears and allow two installments. Check the current DuPage schedule before planning due dates.
- Your lender usually starts collecting monthly escrow at closing, and they may also collect an initial amount to fund the account.
- Expect an annual escrow analysis and an adjustment to your payment if taxes change.
Work with a local guide
You deserve a clear plan for your payment, not surprises after closing. If you want help reading a tax bill, confirming exemptions, or building an accurate monthly budget for a Downers Grove home, we’re here to help. Reach out to the JLG Group for a friendly, local consultation.
FAQs
Will my tax bill match the seller’s last bill?
- Not always. Taxes are billed in arrears, levies can change, and assessments may be updated. Use the seller’s bill as a guide and get a current escrow estimate from your lender.
Do Downers Grove homeowners receive a standard exemption?
- Some common exemptions exist, such as a homeowner (homestead) exemption and senior or disabled programs, but eligibility and amounts vary. Confirm what applies to the parcel and apply if eligible.
When does my lender start collecting taxes via escrow?
- Typically at closing. Your monthly mortgage payment will include escrow, and the lender may collect an initial cushion as allowed by RESPA. Your loan estimate and closing disclosure will show the amounts.
Can I waive escrow and pay taxes myself?
- Some lenders allow escrow waivers for certain loans and qualifications, while others require escrow. Ask your lender about options and responsibilities if you pay taxes directly.
How often are DuPage properties reassessed?
- Reassessment schedules can vary. Check the current cycle with local assessment authorities and watch for any planned mass reassessments.
