Your home loan consists of four elements, two that you are probably aware of, and those are the principal and interest. Two additional elements, taxes and insurance, must also be considered when applying for a loan, secondary elements which can be the deciding factors in whether you get approved for a loan or not.

Which brings us to an important question — if you are in the market for a new home, have you factored in what your property taxes and homeowners insurance premiums will be?

Some things for you to consider:

You may have a general idea how much taxes you’ll be paying annually for your home, but there are factors which can skew these numbers tremendously, even in the same taxing district.

For example, taxes on a three bedroom ranch home could be higher than on a four bedroom colonial, because the width of a ranch home is wider than with a colonial. Other factors that can make a difference include: the age of the home, location, and property size.

Homeowners’ insurance isn’t as easy to figure out today as it was in the past. You may think that $500 annually will cover your insurance needs but discover that your home is in a flood plain, necessitating that you take out expensive flood insurance which is only available through the federal government.

You also discover that since your home is a little too close to the ocean, where all homes have seen rates double, triple, even quadruple since the 2005 hurricane season. What had once been a fairly small expense, home insurance isn’t any longer.

You’ve done your homework finding an excellent mortgage loan. Now go and check out what you’ll be paying for property taxes and homeowners insurance to see if you can really afford your new home.

Tags: home buy, home insurance, home loan, mortgage, private property, Property Taxes, real estate

How good is your homeowners’ insurance policy? Has it been updated since you first took it out? Does it reflect the big surge in home prices over the past ten years?

Insurance can be one of those things you get and quickly forget about. Sure, annual premiums must still be paid, but if the rates haven’t gone up all that much over the years, you may not notice just how much your insurance coverage you really have. Then again, if you live in a Gulf state, then you probably have seen your insurance costs double, triple, and even quadruple in a few short years.

Paying more for insurance doesn’t necessarily mean that the insurance you have now covers all of your needs as it did back then. Your insurance company may have been tracking current housing conditions and adjusting your coverage accordingly, but you can’t guarantee that they have or that their calculations reflect your home’s value.

In addition, construction costs have skyrocketed and subtle changes in your policy may have changed some key provisions, specifically limiting the cap on the home’s replacement value.

So, what is the solution? Answer: find your homeowners policy and check to see if it is adequate for your current needs. If it isn’t, contact the insurance company to adjust your policy accordingly. Furthermore, if you aren’t satisfied with the proposed modifications, start shopping around for a new policy.

Tags: earthquake insurance, flood insurance, home value, home worth, homeowner's insurance, insurance coverage, insurance policy, insurance premiums

Homeowners will often gripe about their taxes, but not too many people will actually do something about it. According to the National Taxpayers Union (NTU), more than 60% of all taxable property in the U.S. is over-assessed. This same group has discovered that only 2% of taxpayers will contest their property taxes.

Consumers are often shocked when they open their property tax bills to discover that sharply increasing home values has resulted in a bigger chunk of their money going toward paying property taxes. Rather than taking taxes at face value, the NTU and other consumer activists urge homeowners to fight the reassessment. But first, you must do your homework.

Steps To Reduce Your Property Taxes

There are several steps you must take before fighting City Hall:

How long before you must appeal? In most localities, you have a certain amount of time to appeal your tax bill before it your new rate takes effect. Starting the appeal process early will take the pressure off of what can be a long, drawn out process.

Build your case. In order to have a chance of winning a reduction, you’ll have to build a compelling case. Property tax errors can involve a number of factors including: the wrong square footage is listed for your home and/or property; comparable homes in the neighborhood are taxed for less; the number of bedrooms or baths the assessor says that you have is wrong; the location of your property is less favorable than homes of similar size (you are next to a water tower or on a busy street), etc.

Arrange a meeting. If after completing your research that you believe you have a winnable case, then arrange to meet with the assessor privately. Most cases can be settled without a hearing, but head to the hearing if the assessor will not meet with you or if he doesn’t reduce your taxes to a satisfactory level.

Get organized for a hearing. If you must attend a hearing, having supporting documentation including photographs, spreadsheets, and related files will strengthen your case. Consider the services of an attorney if you don’t have the time or expertise to challenge your taxes. Most will accept payment based on winning your case.

If you win your case, you could save hundreds of dollars annually in property taxes. However, if you lose your case don’t be disheartened — you may be able to file and win an appeal in subsequent years, so keep your research handy and update it as needed.

Further Reading

How to fight your ballooning property tax

Trim Your Property Taxes

Resources

Estimating The Home Value

Home Remodeling Services

National Taxpayers Union

Tags: city hall, cut taxes, Property Taxes, reduce taxes, tax assessment, tax charts