Insurance & Property Taxes: The Added Cost
When you buy a home, you'll need to make monthly mortgage payments. These payments include the principal and interest on your loan, as well as property taxes and homeowner’s insurance.
Property taxes are assessed by the local government and are based on the value of your home.
Homeowner’s insurance protects you against financial losses if your home is damaged or destroyed by fire, theft, or other events.
The amount of property taxes and homeowner’s insurance you pay will vary depending on the location of your home, the value of your home, and the type of insurance you choose. You’ll want to factor in the cost of property taxes and homeowner’s insurance when you're budgeting for your monthly mortgage payments, so you can avoid any surprises down the road.
Estimating the Cost
- Contact your tax assessor's office to find out the property taxes for your desired home.
- Get quotes from different homeowner’s insurance companies to compare rates.
- Consider getting a larger homeowner’s insurance deductible to save money on your monthly premiums.
Things to Keep in Mind
- The amount of your monthly mortgage payment will likely increase if your property taxes or homeowner’s insurance premiums go up.
- If you don't pay your property taxes or homeowners insurance on time, you could lose your home.
- It's important to have a good understanding of your homeowner’s insurance policy so that you know what is and is not covered.
- You may be able to save money on your homeowner’s insurance by bundling it with other insurance policies.
