Understanding the Link Between Property Taxes & Your Mortgage Payment

Delaware’s known for lower property taxes which can reduce your mortgage payment. 

When buying a home, taxes are one of the expenses that can make a significant difference in your monthly payment. Do you know how much you might pay for property taxes in your state or local area? Knowing this information is one big reason why many choose to make their home in Delaware.

The Taxes Nitty Gritty

When applying for a mortgage, you’ll see one of two acronyms in your paperwork–P&I or PITI–depending on how you’re including your taxes in your mortgage payment.

P&I stands for Principal and Interest, and both are parts of your monthly mortgage payment that go toward paying off the loan you borrow. PITI stands for Principal, Interest, Taxes, and Insurance, and they’re all important factors to calculate when you want to determine exactly what the cost of your new home will be.

TaxRates.org defines property taxes as,

“A municipal tax levied by counties, cities, or special tax districts on most types of real estate – including homes, businesses, and parcels of land. The amount of property tax owed depends on the appraised fair market value of the property, as determined by the property tax assessor.”

This organization also provides a map showing annual property taxes by state (including the District of Columbia), from lowest to highest, as a percentage of median home value.

property taxes and your mortgage payment

How does where you’re living measure up?

The top 5 states with the highest median property taxes are New Jersey, New Hampshire, Texas, Nebraska, and Wisconsin. The states with the lowest median property taxes are Louisiana, Hawaii, Alabama, and Delaware, followed by the District of Columbia.

Depending on where you live, property taxes can have a big impact on your monthly payment. To make sure your estimated taxes will fall within your desired budget, let’s get together today to determine how the neighborhood or area you choose can make a difference in your overall costs when buying a home.

Source: Keeping Current Matters, http://bit.ly/2PHIYtz

We delight in helping home buyers to relocate to beautiful Delaware where having lower property taxes is just one of the many perks to be discovered when they move here. Let’s discuss the best way to prepare to get a great deal. Schedule an appointment today.