Do you know how property taxes and insurance affect your monthly house payment? They can adjust year by year, so it's important to consider them when you decide on your monthly payment.
Do you know how property taxes and insurance affect your monthly mortgage payment?
Your property taxes and insurance are added to your principal and interest to make your total monthly payment. They're held in an escrow account so that when they need to be paid (typically on a semi-annual basis) they'll be available. It's great that you don't need to pay them individually, but you need to consider them as you decide how much you can afford for your monthly mortgage payment.
Property taxes and insurance adjust each year, affecting your monthly payment.
Here's the kicker—property taxes and insurance will adjust each year, so your escrow account will adjust each year, which could affect your monthly mortgage payment.
A good real world example is a client of mine who contacted me telling me that her property taxes are changing from $1,200 a year to $4,000 a year. This will change her monthly mortgage payment by $600! This amount would really affect our budgets moving forward in years to come.
Really think about your property taxes and insurance as you decide what your monthly mortgage payment will be and what you can afford. If you have any questions about this topic, we're always here to help. Just give me a call or send me an email.
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