Need To Consider Property Taxes In Mortgage Qualification
If you are a home buyer, especially a first time home buyer, property taxes in mortgage qualification is one of the most important aspects you need to consider. Property taxes vary from state to state and county to county and sometimes, city to city. There are situations where property taxes in a particular geographic region can be ridiculously high which can definitely affect your buying power because property taxes in mortgage qualification can offset the debt to income ratios. Property taxes in mortgage qualification are calculated in your housing ratios and could affect your bottom line buying power of a particular home. When a mortgage lender qualifies you for a residential mortgage loan, the mortgage loan originator will ask what the current property taxes are on the subject property to calculate property taxes in mortgage qualification. There are cases where a $100,000 home has property taxes assessed at $7,000.00 per year and there are other cases where a $400,000 subject property only has property taxes that are only $1,500. Property taxes are not fair and do not make sense sometimes but propety taxes in mortgage qualification is extremely important. Many folks make the mistake of purchasing a home with high property taxes and regret it after they move in. Your realtor will help you with lower property taxes areas when shopping for a home.
Claiming Homestead Exception For Property Taxes
In general, non owner occupied properties have higher property taxes than owner occupied properties. If you are purchasing a property from a non owner occupied owner, the current non owner occupied property taxes will be used to qualify property taxes in mortgage qualification and unfortunately a homestead exception will not apply for mortgage qualification purposes. This can be an issue if you have high debt to income ratios and the mortgage loan underwriter will be using the current investor owned home’s property taxes for income qualification.
Appeal Property Taxes If Your Property Taxes Are Higher Than Your Neighbors
If you are paying higher property taxes than your neighbors, you can also appeal your property taxes with the county Assessor’s Office. Be prepared to provide proof of similar and like properties like yours within a 1 square mile area. You can also hire a private appraiser to appraise your property and contest the value and your property taxes with your county.