How Will a Tax Rate Affect Your Payment?

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Everyone likes to talk about taxes, right? Unfortunately, tax rates are necessary to consider when you are searching for homes. Your monthly mortgage payment can increase significantly depending on the current tax rate.

Breaking Down Tax Rates

For example, if you have a $400,000 property and the tax rate is 1.1% compared to a tax rate of 2%, you could pay roughly $300 more per month with the higher tax rate. So the slightest change in percent can change your mortgage payment significantly. If your property is even more than $400,000, then the difference will be even greater.

How to Calculate Tax Rates

Find what the county has assessed your potential home for the previous year. You can then see how much the tax payments were that year and divide it into the tax-assessed value for the current year. Then you will get an estimated idea of what your tax payments will be.

Why Is It Important to Look at Tax Rates?

The tax rate can be looked over when calculating how much you can afford in mortgage payments for first-time home buyers. However, do not forget to consider that the tax payment will change year to year, and you have to be prepared for an increased price as time goes on. Even if the tax rate stays the same, your estimated property value may increase, increasing your overall tax bill.

There are two sides to the coin. You want to be in a house that is increasing in value. Your investment depends on that. But as the home increases in value, the tax payment rises along with it.

Contact a Real Estate Professional

Real estate does have some hidden fees that are hard to calculate if you are not familiar with the business. However, when you find a real estate agent you can trust, you can ensure that you don’t waste your time looking for homes outside of your price range.

If you need help calculating your tax rate as you look for homes in Temecula, let me help you. Then, when you are prepared with your mortgage payment, including the tax rates, you will better know what homes you can afford. Take control of your real estate issue by texting, calling, or emailing me at (951) 473-0390 or [email protected].