Question about looking for a house

I get the feeling the failure to plan for the rise in property taxes is the reason half the houses in my neighborhood (which was built mostly in the last 12-24 months) are currently for sale.

 

Thats terrible if true. Doesn't the lender or realtor have a duty to tell that?

 

That story about the redneck neighbor is hilarious. Glad it ain't me. I'm more likely to be that neighbor instead.

 

There are good doctors, bad doctors, good cop, bad cop, as with Realtors, there are good Realtors and unfortunately bad Realtors. You really have to be careful who you choose and make sure they let you know every step and really educate you. It's a big investment and you want to make sure it goes right.

 

I assume a lot of people in my neighborhood didn't use realtors, buying directly from the builder instead. And while I would think the lender would want to make sure the buyer knew that the taxes were going to go up (our lender made a big point of telling us all about it, even though we were already fully aware), I guess there are some who don't hit it home enough.

Not to mention that some people use a mortgage broker, many of whom are more concered about getting the deal closed and getting their commission than whether the buyer can afford the property in the longer-term.

One of the downsides of affordable housing and low interest rates is people jumping into buying a house without really understanding what they're doing and not ending up with people who are willing to explain it.

 

Wow, that sucks that people don't know about property tax before buying a house. I feel sorry for them but when doing something that big you would think they'd do a lot of research.
Low interest rates made a lot of people crazy I guess.

 

They don't cost you anything. Their payment comes from the seller.

 

I'm a Professional Inspector TREC # 6443

Email me with any questions jackcarstens@sbcglobal.net or call my cell (281)923-6663

Good Luck.

p.s. stay away for the older type fixer uppers unless you consider yourself a handy guy.

 

Be verrrry careful buying a newly built house. A couple of friends of mine walked away at the end because of defects that the builder wouldn't satisfactorily fix. A fairly new, lived in house has the "bugs" already worked out. There are few things more heartbreaking than moving into a brand new house and dealing with the problems. It can break marriages too.

 

Questions about the property tax:

Let say I brought a house for 250K, and the property tax rate is at 1%, is it mean that I have to pay 250 dollars for property tax every month, or is it something else?

 

It means you have to pay $2500 each year. Tax rates in Texas are around 3.2%, however. So you're looking at $7800 or so. It is deductible at least. So depending on your tax bracket you'll be paying around $5200 in reality.
Also, a lot of mortgage companies will escrow this and pay it for you at the end of the year. They will do this for insurance too. However, a lot of times they estimate wrong how much it will be so you might have to pay more at the end of the year to make up the difference. If you don't plan for this you might not have enough money to pay.
Escrow is a rip-off. It's for people who can't manage their money. If can save up the end of the year to pay off your taxes and insurance then do it yourself. Put the money in a CD all year long or something and make some moeny off of it. However, some lenders won't let you get out of escrow if you put down less than 20% and even then they make you pay some fee to get out of it.

 

usually in the 1st year until dec the property taxes are based on unimproved taxes (land value only, which is roughly 1/3), then the 2nd year that increase to improved taxes and the full tax value, but you do get to claim homestead in the state of texas which decreases the tax value of your home by 20%.

the lender typically will state that in the disclosures packet when you first apply for a loan. This packet by law is supposed to be in your hand within 72 hrs of application.

you actually can decide on not escrowing by using the 80/20, 80/15/5 or 80/10/10 loans.
im sure you knew already knew that though

 

I thought there was supposed to be a good faith effort to disclose that very thoroughly even though you should figure it out yourself.

 

Yeah, you can get out of PMI doing this too. With rates the way they are it's not a bad thing to do if you can get that 2nd lien paid off quick.

 

He could do it anywhere in Texas. Any luck finding a Realtor? Tell him to explain the process for you, so you won't run into any road bumps later on.

 

There is a good faith estimate included in the disclosures which pretty much shows you the breakdown, however most times it shows the taxes to be low because of the unimproved value and therefore lowers the monthly payment.
thorough loan officers would tell you these things. but there aren't that many