What Are Property Taxes and Insurance When Buying a Home?

OCT

10,  2023

When you're in the process of purchasing a home, understanding the various financial aspects is crucial. Two significant components of homeownership costs are property taxes and insurance. Let's delve into what these terms entail and how they affect your home buying journey.

Property Taxes: What You Need to Know

Property taxes are levied by local governments to fund public services such as schools, roads, and public safety. These taxes are calculated based on the assessed value of your property, which can vary depending on where you live.

Here are the key points to consider:

  • Assessed Value: Local tax authorities assess the value of your property periodically. The assessed value may not necessarily reflect the current market value of your home.
  • Tax Rate: The tax rate, often expressed in "mills" (one mill is equal to one-tenth of a cent), determines the amount of tax you owe. To calculate your property tax, multiply the assessed value of your home by the millage rate and divide by 1,000.
  • Exemptions: Many jurisdictions offer property tax exemptions or reductions for certain groups, such as seniors, veterans, or low-income homeowners. Check if you qualify for any exemptions in your area.
  • Tax Assessment Appeal: If you believe your property has been overvalued, you can often appeal the tax assessment to potentially reduce your property tax bill.
  • Escrow Account: Most mortgage lenders require borrowers to establish an escrow account, which includes funds for property taxes and insurance. The lender pays these bills on your behalf, spreading the cost over the year.

Your Trusted Partner in Real Estate

Navigating closing costs and the entire home-selling process can be overwhelming. As a seasoned real estate broker serving Maryland, Washington, D.C., and Virginia, I'm here to guide you every step of the way. If you have questions, need assistance, or want a trusted partner to ensure a smooth transaction, don't hesitate to reach out to me at 240-426-5754. Your real estate journey is important to me, and I'm committed to helping you achieve your goals.

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Homeowners Insurance: Protecting Your Investment

Homeowners insurance is a critical aspect of homeownership. It provides financial protection in the event of property damage or loss due to covered perils like fire, theft, or natural disasters.

Consider these factors when dealing with homeowners insurance:

  • Policy Coverage: Different policies offer varying levels of coverage. Ensure you understand what is covered and any optional coverages you might need, such as flood or earthquake insurance.
  • Deductible: This is the amount you'll pay out of pocket before your insurance coverage kicks in. Higher deductibles typically result in lower premiums.
  • Premiums: Your insurance premium is the cost you pay for coverage. It can vary based on factors like the location of your home, its age, and the level of coverage you choose.
  • Claims Process: Familiarize yourself with the insurance claims process, so you know what to do in case you need to file a claim.
  • Escrow Account: Like property taxes, many lenders require you to include homeowners insurance in your escrow account, making it easier to manage these expenses.
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Remember

Property taxes and homeowners insurance are integral components of homeownership, and understanding them is essential when buying a home. Property taxes fund local services, while homeowners insurance protects your investment.

If you're considering purchasing a home in Maryland, DC, or Virginia, I'm here to help. As an experienced real estate broker, I can provide guidance and connect you with the resources you need to navigate the complexities of homeownership. Feel free to contact me, Fernando Herboso, at 240-426-5754 for expert assistance and support throughout your home buying journey.

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Our commitment as your real estate professional is to help you find your dream home at the right timing for you.

It's the biggest purchase of your life, and can assure you that even small mistakes can be costly.  BEWARE, technology changes almost daily and I can help you pinpoint all the homes for sale near your location points. I have access to over 18 million properties from hundreds of locations, including Government  properties, action homes, VA homes, HUD Properties and all available private houses for sale in between.