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.
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