Fha home loans and property taxes gas in back relief


May 5, 2009 – When first time homebuyers start looking for a house to purchase with an FHA home loan, there are many details to sort through; appraisals, interest rates, closing cost considerations and much more. One important factor in the cost of any home that should not be ignored? Property taxes.

When you buy a home with an FHA loan, many of your costs are immediately explained. Your closing costs and FHA mortgage interest, for example-you’ll know what these expenses can add up to before you sign on the dotted line. But property taxes shouldn’t be very far down your list of concerns; you should know what your tax liabilities are on any property before you commit to the purchase. The amount of property tax you pay might not be a deal breaker on the house of your dreams, but property taxes should be considered in any budget.

When you are pre-approved for an FHA home loan and looking for a property to buy, you can get a very good idea of what your potential property tax bill might be simply by checking the listing on the property you want to view. Many times last year’s tax information is included along with other important information on the real estate listing. If it is not published, ask the seller to give you the amount he or she paid last year or have them show you their property tax bill. It’s important to understand that taxes do change; last year‘s payment might not be indicative of this year’s liability. A bit of research will show whether local amendments or recent legislation might have raised the amount you could owe this year on a given property.

Older homes often have lower property taxes than newer ones. The trade off with buying an older home with an FHA loan often comes with repairs and upkeep issues. How old is the roof on the home you want to buy? Do you know how much it will cost to repair or replace the roof when the time comes?

Buying an older home as a fixer-upper is great for those who have the skills to do so, but if you need to hire a team to do the work for you, you may wish to consider the pros and cons of buying an older home versus using your FHA home loan to buy a newer, less maintenance-intensive property. The costs of upkeep might offset any savings you find in property taxes with some older homes.

Many people new to purchasing a home are surprised to learn they can deduct the interest from the FHA mortgage on their federal income taxes. The amount of money you spend on property taxes may or may not be offset by such deductions-it all depends on your specific situation, but you can learn a lot by asking a real estate professional about how to help yourself at tax time by taking the right deductions allowed by law connected to your FHA mortgage and status as a property owner.

Property taxes should always be figured into the final cost of purchasing a home. Know how those taxes can affect your bottom line–prepare for them in the same way you make allowances in your budget for the primary amount of your FHA loan, the interest, and any mortgage insurance you might carry. Divide the total amount of your property tax liability by 12 and save that amount of money each month to prepare for tax season.