Virginia Beach Home Loans: Attack of the Killer Taxes!

Attack of the Killer Taxes!

I am working with a very nice couple. They are buying the home that they have been living in for quite a while. Currently they do not pay PMI, Homeowners, or taxes on the property. They only pay the rent which is pretty high.

They really want to own the home. Their goal when they came into my office was simply to see if they can get qualified for a purchase as they had been turned down several times before. I hate property taxes and recognize them as a necessary evil. Without them towns and cities across the nation would be without a means of survival. Still taxes fluctuate and are rarely the same for a borrower as they are for previous owners. There are many factors that come into play but most especially special tax programs for homeowners. In NY we call it the star program. I'm sure that the name varies from state to state but the programs are all very similar in nature.

Star and other such special real estate tax programs make it difficult for me to gauge exactly what the taxes will be. When someone, anyone; borrows 90% of the value of a home or more they are required to pay their taxes and insurance in their mortgage.

The nice couple that I am working with is faced with higher living expenses and it makes them a bit uncomfortable. Now after I have put a lot of work into getting all of my conditions cleared within a week of receiving the appraisal this nice couple is telling me that they are not sure if they want to proceed. I do respect their concerns, but they are very well qualified and were told in advance that I did not have all of the tax information. I made an estimate on the taxes as I often times do. My estimate was based on the tax assessed value and the local city tax rate. Unfortunately since the last assessment there has been a new assessment which indicated some appreciation. As a result the taxes are a bit higher than my estimate. Still not that much higher and I had let these guys know that the tax and insurance is subject to change.

When you buy a home there are naturally more expenses than if you rented a home (in most cases). If you purchase the home that you are living in already and you borrow more than 90% of the homes value to make the purchase you will more than likely see a bit higher monthly housing expense.

Christopher Ohlsen

37 Boynton Ave

(845) 243-5293 (Office)

(518) 565-0799 (Cell)

www.plattsburghmortgage.net

chris.ohlsen@guaranteedrate.com

 

 

Comment balloon 6 commentsChristopher Ohlsen • December 27 2007 09:48AM

Comments

Great post. Have you explained to them that they will recieve a biger tax refund when they own their own home? So even though they are going to pay more monthly they will be getting a bigger refund next year (2009).
Posted by Jeff Thompson (Thompsons Home Inspections) over 9 years ago
Fortunately the tax benefits, appreciation and personal investment normally make up for it..
Posted by Al Maxwell, Real Estate Agent (Keller Williams) over 9 years ago
I have a great program that will show them the benefits of it all
Posted by Dave Woodson, Not the Average Agent (Dave Woodson) over 9 years ago

Dave - I'd like to hear more about how you explain these issues.

Al - Definitely. Normally these things do make up for it.

Jeff - I've gone over all of it with them. Their issue with it is that they do not get returns as it is now due to income. I have explained to them they they will pay in less and maybe even get a return. This is not a dead deal by any means, just a little hickup.

Posted by Christopher Ohlsen (Credit Werx, LLC.) over 9 years ago
They've been trying to pass a law to increase sales tax and delete property tax in florida.  Seems like a great idea to me!
Posted by Sandy Pitchford, Palm Beach, Jupiter, Tequesta Real Estate (Distinct Estates) over 9 years ago
If the property is selling for less than it previously sold for the buyers may be able to get a reduction in the assessment.  Pull the comps make sure the sale and the taxes are in line with others that comp the same, exactly the same or as close as you can get.  Ny is famous for taxing 2 people with 3000 sq ft homes at two totally different rates in the same town!
Posted by Jeffrey Dolfinger, NRBA Member (24/7 Realty Inc.) over 9 years ago

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