• Resources
  • Privacy Policy
Prime TitlePrime TitlePrime TitlePrime Title
  • Services
    • Home Buyers
    • Home Sellers
    • Real Estate Agents
    • Lenders
    • Builders & Contractors
    • Commercial
  • Team
  • Blog
  • Contact
  • 337.235.0047

How Property Taxes And Insurance Can Affect Your Mortgage

NextPrevious

How Property Taxes And Insurance Can Affect Your Mortgage

By Paul Gardner | Industry Topics | Comments are Closed | 22 February, 2022 | 0

Did you know that your mortgage payments may fluctuate? Homeowners are often surprised when their monthly payments change, but it’s a relatively common occurrence due to changes in property taxes and insurance premiums. 

When you finance the purchase of your home, the monthly mortgage payment includes the principal and interest for the loan as well as property taxes and homeowners insurance if you choose to, or have to, escrow those payments. 

If those funds are held in escrow, it simply means the lender collects the money for taxes and insurances each month and holds them in an account until those bills come due each year. The lender then pays the bills on your behalf. 

Typically, the only elements in the mortgage payments that will fluctuate are the property taxes and the insurance premiums. 

Property Taxes

Property taxes are the monies paid by property owners to their local and state governments to fund various services. The amount paid on a particular property is based on its assessed value. The higher the assessed value of the property, the higher the taxes will be. 

Factors that can cause changes to property taxes can be anything that either increases or decreases the value of the property such as renovations and economic conditions. Those can change the value at any time, meaning the amount of property taxes due on the property can change at any time.  

Homeowners Insurance

Lenders require home buyers to purchase homeowners insurance to cover damages to the property. Homeowners insurance premiums are based on risk factors and the amount of money the insurance company would have to pay out in the case of a claim. 

Before closing on the loan, the lender will estimate the cost of insurance based on the zip code and comparable homes in the area. But once you are ready to close on the loan, you will have to shop around and find a policy that meets your needs. And, even after you have closed on the loan, you may want to regularly shop around to see if you can get better policies or better prices. Any changes to the policy will reflect in the premium which will, in turn, impact your monthly mortgage payment. 

Because they can both have a significant impact on your mortgage and, therefore, your budget, it’s important to know and understand exactly what you will be paying in property taxes and insurance premiums before you close on a loan. This helps you better decide what you can really afford to pay each month. It’s also a reminder to build some flexibility into your budget for fluctuations in costs. 

Buying a Home, Property Taxes, Realtors, Selling a Home, Title Industry, Title Insurance

Paul Gardner

Paul’s core practice centers on the examination of title and real estate transactions. He has extensive litigation experience, and has spent several years representing and advising lawyers, real estate agents, and insurance agents in connection with professional liability claims.

More posts by Paul Gardner

Related Posts

  • Understanding Commercial Closings

    By Paul Gardner | Comments are Closed

    Commercial real estate closings are very different from residential real estate closings.  In general, they are more complicated because they have more extensive procedures. Negotiations also tend to last much longer (up to a yearRead more

  • Why is a Land Survey So Important Before Closing?

    By Paul Gardner | Comments are Closed

    Whether or not the lender requires it, every buyer should invest in having a property survey (also called a land survey) conducted before closing on a real estate purchase.    Land surveys are critical forRead more

  • Real Estate Trends for Q4

    By Paul Gardner | Comments are Closed

    What does the real estate market look like for Q4 of 2022?    Home sales typically slow down this time of year and 2022 looks to be no different. In general, experts indicate that theRead more

  • Selling in a Buyer’s Market

    By Paul Gardner | Comments are Closed

    Selling in a Buyer’s Market Real estate industry experts anticipate a cooling in the housing market and a shift away from the seller’s market of the last two years toward more of a buyer’s market.Read more

  • Understanding Different Loan Types

    By Paul Gardner | Comments are Closed

    Understanding Different Loan Types   If you need to borrow money, there are various types of loans from which to choose. The ones most people recognize are automobile loans, student loans, and mortgages, but thereRead more

NextPrevious

Contact Us
Request Fees
Title Request

Blog Categories

  • Announcements
  • Events
  • Industry Topics
  • Lagniappe
  • Uncategorized

Newsletter

  • This field is for validation purposes and should be left unchanged.



1819 W. Pinhook Road, Suite 100
Lafayette, LA. 70508

337.235.0047
Contact Us

Services

  • Home Buyers
  • Home Sellers
  • Real Estate Agents
  • Lenders
  • Builders & Contractors
  • Commercial

Site Links

  • Blog
  • Team
  • Contact
  • Resources
  • Privacy Policy
  • Title Request

Newsletter

  • This field is for validation purposes and should be left unchanged.

  • Services
    • Home Buyers
    • Home Sellers
    • Real Estate Agents
    • Lenders
    • Builders & Contractors
    • Commercial
  • Team
  • Blog
  • Contact
  • 337.235.0047
Prime Title