Property taxes are one of the items that can have a significant impact on your mortgage payment. This question should be addressed for every home that makes the list. What is the local and state property tax for this house and how will it affect the amount of money that you will be able to borrow for this home?
Look for the acronyms– P&I or PITI – when applying for a mortgage. This will have an impact on what you pay and how you pay it.
Both are parts of your monthly mortgage payment that go toward paying off your mortgage each month. P&I stands for Principal and Interest. PITI stands for Principal, Interest, Taxes, and Insurance.
TaxRates.org gives this definition
“A municipal tax levied by counties, cities, or special tax districts on most types of real estate – including homes, businesses, and parcels of land. The amount of property tax owed depends on the appraised fair market value of the property, as determined by the property tax assessor.”
Here is a breakdown by state showing annual property taxes by state (including the District of Columbia), from lowest to highest, as a percentage of median home value.New Jersey, New Hampshire, Texas, Nebraska, and Wisconsin are the top 5 states with the highest median property taxes. The lowest median property taxes are found in Louisiana, Hawaii, Alabama, and Delaware followed by the District of Columbia.
Property taxes have a big impact on your monthly payment. let’s get together today to determine how the neighborhood or area you choose can make a difference in your overall costs when buying a home. Let's make sure your estimated taxes will fall within your desired budget.