When you're planning your budget as a new home owner, there's one important detail that shouldn't be overlooked among the interest rates, monthly FHA mortgage payments and other considerations. It's easy to forget about property taxes.
News, updates, and explanations to keep you informed.
FHA Home Loans and Property Taxes
Are you looking for a house to purchase with an FHA home loan? There are many details to master, including appraisals, interest rates, closing cost considerations and much more. When you're planning your budget as a new home owner, there's one important detail that shouldn't be overlooked among the interest rates, monthly FHA mortgage payments and other considerations. It's easy to forget about property taxes, but savvy budget planners take the amount due at tax time and divide it out over the course of the year--a plan that can soften the financial burden when it comes time to pay up.
When you get approved for your first FHA loan, many of your costs are immediately explained. You'll learn all about closing costs, the how interest rates on FHA mortgages work, and what you might need to pay to close the deal. Property taxes should be added to your list of financial planning issues; you should know what your tax liabilities are on any property before you commit to the purchase. The amount of property tax you pay can depend on several factors, and in today's housing market you'll want to know just what the government thinks your new home is worth as well as the appraiser.
WHERE CAN I GET PROPERTY TAX INFORMATION ON THE HOME I WANT TO BUY?
Sometimes it's easy to learn what your potential property tax bill might be simply by checking the listing on the property you want to view. In many cases, the previous year’s tax bill amount is included along with other important information on the real estate listing. If it is not published, try asking the seller to show you last year's property tax bill. Remember that taxes change, and last year’s payment might not be the same amount due on this year's property tax bill. But knowing what was owed last year gives you a good idea of what to expect in the coming months.
DO NEW HOMES HAVE HIGHER PROPERTY TAXES?
Older homes can have lower property taxes, but this isn't always a good reason to choose an older home. The trade off when you purchase an older home with an FHA loan? Dealing with repair and upkeep issues. In addition to property taxes, will you have to budget for a new roof on the property? How soon until the roof becomes an issue? Do you know how much it will cost to repair or replace? Consider the pros and cons of buying an older home versus using your FHA home loan to buy a newer, less maintenance-intensive property. The costs of upkeep might offset any savings you find in property taxes with some older properties.
ARE THERE ANY OFFSETS TO MY PROPERTY TAXES?
Did you know you can deduct the interest from the FHA mortgage on your federal income tax? The amount of money you spend on property taxes may or may not be offset by such deductions—it all depends on your specific situation, but you can learn a lot by asking a real estate professional about how to help yourself at tax time by taking the right deductions allowed by law connected to your FHA mortgage and status as a property owner. You should also get advice from a tax pro about how to take the deductions you're entitled to by law with regard to your new home.
When you're doing your financial planning prior to signing an FHA mortgage, make sure your property taxes are figured into the cost of purchasing the home. How do they affect your bottom line? Make allowances in your budget for property taxes along with your monthly mortgage payments, and you'll feel less of a financial burden when April 15th rolls around.