Insurance and Property Taxes

Insurance and property taxes are unavoidable expenses of owning a home. In fact, to get a mortgage, you're likely going to have to establish that you have homeowners insurance. Factoring this into the total cost of your home is a vital step before you buy anything. There are many good deals out there on the market right now. This makes it tempting to buy into a home that you may not have been able to afford not too long ago. These two factors will have to weigh heavily into your decision to go ahead and make such a move.

More House, More Tax

If you have a home you can afford right now but are looking at a larger or better home that is tempting you because of it being offered at a relatively low price, you're going to have to take taxes into consideration. As far as your mortgage underwriter is concerned, these will be factored in as a monthly cost and you'll want to regard them in that same way.
Any good realtor will be able to give you the tax information on the property that you're considering. You need to take this tax amount and, obviously, divide it up into 12 to determine how much it translates to as a monthly payment. Even though the total tax amount charged throughout the year may seem small to you, you may be surprised to find out that, when it is calculated monthly, it could push the monthly cost of the home into territory that you cannot reasonably afford.
Property tax records are public record in most places so, if you're curious about the amount of tax charged for any given property, you should be able to find that out from your county assessor's office.

Homeowner's Insurance

When you're looking at a luxury property, you're generally going to do exactly with the advertisements tell you to do. You're going to picture what it would be like to sun yourself next to that big pool in the back yard, you're going to love the high-end appliances, the top quality finishes and all of the other elements that make these types of houses attractive. What you need to consider is that, when you upgrade in terms of the quality of your home, you're going to have to upgrade in terms of your homeowners insurance, as well.
For instance, adding a backyard swimming pool may require you to get liability insurance for slip and fall accidents that is much higher than what you currently carry. A larger house with a higher property value means that your homeowners insurance premiums are going to be higher, as well.
Just as is the case with your property tax, you'll want to divide this into 12 to get a realistic idea of how much your homeowners insurance is going to cost you each month. Remember that, if you live in an area that's prone to floods, wildfires or other hazards, your insurance rates are going to reflect that. If you live in an area where those hazards are not factors right now, relocating to an area where they are may mean a substantial increase in homeowners insurance costs.
- 10/25/2012 10:47:18 AM by Admin | with 0 comments

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