Can someone explain what it means when your property is assessed?

Periodically, the County in which you live reassesses your property value. Based on the the counties formula, so much goes to school districts, road maintenance, ect and for the most part taxes usually go up not down. Now, if you look at your year end report from your mortage company, it will show how much money you have in escrow to pay your taxes, insurance ect. If you had enough money to pay all these things without going into a deficit, your mortgage payment should not go up but if there's a deficit that amount will be divided by 12 and added to your payment. It has no bearing on your equity. Think about your neighbor who is paying taxes on a $80,000 home based on an assessment made 4 years ago but last year he made a major improvement to his home which cost him $40,000. When the county reassesses his home they will note the major improvement and raise the value of his property. It's just a tool to insure everybody is paying the fair value of their home.