How Property Taxes Impact Your Home’s Purchase

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Lots of people are always asking me, “How exactly do property taxes of a home I’m going to be purchasing affect me and my monthly payment?” Basically, your bank will collect 1/12 of the property taxes within your mortgage payment once you close on your new home. This can affect you in several ways.

First, they can determine how much the bank gives you for your mortgage. When the bank is approving you for a mortgage, they determine how much they’re willing to lend you per month, which has to include principal and interest (the actual mortgage payment), 1/12 of your taxes, and 1/12 of your homeowner’s insurance.

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Property taxes determine your buying power and your mortgage rate.

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Here on Long Island, where the taxes are typically above $6,000 and somewhere below $15,000, they also have a huge impact on your buying power. What do I mean by that? Let’s just assume that the bank approves you for a mortgage of $300,000, with taxes of $10,000 a year. That equates to a monthly number we won’t discuss here. However, if you were to find a home with a tax of $8,800 a year instead of $10,000, that would equate to $1,200 a month less, which would give you an additional $100 a month to spend on your mortgage payment. $100 a month on today’s interest rates is approximately $20,000 more you can spend on a home!

So, property taxes also determine your buying power. When you’re searching with your Realtor, make sure that you pay attention to the property taxes because that definitely affects how much you can spend on your home.

If you’re searching for a home or know someone who is, please contact me by phone or email.

How Do You Know When It’s Time to Move?

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Want to buy a home? Search all homes for sale.

It’s tough to pinpoint the exact moment when you should realize it’s time to move to a new home. Today we are going to discuss five obvious warning signs that it’s time for you to move into a new home. They are:

1. Money
The first reason you might need to move is money. Do you need a new kitchen? How long will it take and how much will it cost you to do that renovation? It might make more sense to put that money into the sale of your home and buy a home that already has the features you want in it.

2. Clutter
If you’ve been catching yourself tripping over objects and constantly running out of storage space, that’s another sign it’s time to move.

3. A growing family
If you already have kids with more on the way, it may be time for you to branch out.

4. A shrinking family
On the opposite end of the spectrum, if you have kids that have left the home and you are utilizing less and less space, it might make sense for you to downsize. Moving into something smaller will save on all your bills, as well as give you a nice bit of profit when you sell.

5. Neighborhood
Does the neighborhood you're living in meet your needs as far as home appreciation goes? It might make more sense for you to sell now and re-invest in a neighborhood where market values are rising at a quicker pace.

If you need to discuss any of these reasons to move, or have any questions for us, give us a call or send us an email. We would love to help out!