How property taxes impact your mortgage
Do you understand the difference between P&I vs PITI?
Do you understand the difference between P&I vs PITI?
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<strong>How</strong> Property Taxes Can Impact Your Mortgage<br />
Payment<br />
When buying a home, <strong>taxes</strong> are one of the expenses that can make a significant difference in <strong>your</strong> monthly<br />
payment. Do you know how much you might pay for <strong>property</strong> <strong>taxes</strong> in <strong>your</strong> state or local area?<br />
When applying for a <strong>mortgage</strong>, you’ll see one of two acronyms in <strong>your</strong> paperwork – P&I or PITI – depending<br />
on how you’re including <strong>your</strong> <strong>taxes</strong> in <strong>your</strong> <strong>mortgage</strong> payment.<br />
P&I stands for Principal and Interest, and both are parts of <strong>your</strong> monthly <strong>mortgage</strong> payment that go toward<br />
paying off the loan you borrow. PITI stands for Principal, Interest, Taxes, and Insurance, and they’re all<br />
important factors to calculate when you want to determine exactly what the cost of <strong>your</strong> new home will be.<br />
TaxRates.org defines <strong>property</strong> <strong>taxes</strong> as,<br />
“A municipal tax levied by counties, cities, or special tax districts on most<br />
types of real estate – including homes, businesses, and parcels of land. The<br />
amount of <strong>property</strong> tax owed depends on the appraised fair market value of<br />
the <strong>property</strong>, as determined by the <strong>property</strong> tax assessor.”<br />
This organization also provides a map showing annual <strong>property</strong> <strong>taxes</strong> by state (including the District of<br />
Columbia), from lowest to highest, as a percentage of median home value.<br />
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The top 5 states with the highest median <strong>property</strong> <strong>taxes</strong> are New Jersey, New Hampshire, Texas, Nebraska, and<br />
Wisconsin. The states with the lowest median <strong>property</strong> <strong>taxes</strong> are Louisiana, Hawaii, Alabama, and Delaware,<br />
followed by the District of Columbia.<br />
Bottom Line<br />
Depending on where you live, <strong>property</strong> <strong>taxes</strong> can have a big <strong>impact</strong> on <strong>your</strong> monthly payment. To make sure<br />
<strong>your</strong> estimated <strong>taxes</strong> will fall within <strong>your</strong> desired budget, let’s get together today to determine how the<br />
neighborhood or area you choose can make a difference in <strong>your</strong> overall costs when buying a home.<br />
Contact Mary@TeamPetruzzi.com for more information.<br />
T E A M P E T R U Z Z I | A l w a y s M o v i n g Y o u F o r w a r d | 3 1 7 - 3 7 0 - 5 5 0 9 2019
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