Property taxes/Realtor sites (Austin, Round Rock: comparable sales, sales, real estate)

[Bobby Davro]

I've been looking at homes in Austin (where I'm headed) from England (where I am), and after searching several Realtor typer sites (Zillow especially) as soon as you add on the property tax/insurance rates the mortgage estimates sometimes more than double; is that right? Can the tax be 100% of the mortgage payment or more?

Is there a simple way to calculate property tax? And also why does it include insurance? Does insurance get paid to the state, or is it part of the mortgage payment somehow?

Someone please enlighten me. Many thanks.

[TexasHorseLady]

Very roughly, your taxes and insurance are included in your mortgage payment if you have less than 20% of your own money invested in the property. That way, the lender pays them and knows that they are paid, thus protecting the asset they've loaned the money on. Insurance isn't included in your taxes, but it is included in your mortgage payment (PITI - Payment, Interest, Taxes, Insurance) for that reason.

Most counties in Texas (and definitely the counties in the Austin area) have Appraisal District websites where they show the tax rates (most often broken down by taxing authority, so that you can see that if you're in a particular MUD, what percentage they'll be taxing you over the house in the next neighborhood over that isn't in the MUD, say). If you're looking for the taxes on a particular address, sometimes you can find that information by doing a property search on the appraisal district website.

However, what a particular property's taxes are depends on things like whether or not the homeowner has any of a variety of exemptions that are available (homestead most everyone living in the house they're buying has, but there are over 65, disabled, etc., that might be impacting the actual taxes). A real estate agent can find the estimated taxes versus the actual taxes on a particular property for the past year quite easily for you.

[FalconheadWest]

I'll start by saying don't look at Zillow for property values or comparable sales data in Texas. Texas is a non-disclosure state so Zillow is for entertainment purposes only, whereas it might have useful information in other states.

As for mortgage payments, to qualify for a mortgage, the lender wants to make sure you qualify for the entire property "out of pocket" expenses. As mentioned above, that's PITI. That's why it's all included in mortgage calculators.

Taxes aren't 100% of the mortgage payment. Depending on where you are in the area, the rates vary. I'm in Bee Cave which is West of Austin and my rate is about 1.9%. Lakeway, just a couple of minutes away is mostly about 2.3%. Further up 620, Steiner Ranch is about 2.67%. Going into Cedar Park you're into the 2.5-2.8's. Round Rock has areas up around 2.9% and Pflugerville has some 2.7-2.9% areas...

I could go on and on, bu as suggested, you can get exact figured online at the county websites. You need to know that each city, each county, each school, each MUD, each entity that the property feeds into will have a different number. You can't give one value for all of Round Rock or all of the City of Austin, or all of Travis County. It's a little confusing, but I like to use 2.5% as an average for buyers until they can more narrow down the area they're concentrating.

Then, insurance is typically calculated at about .75-.80% for lender's calculations. Again, your actual policy will vary depending on what type of coverage you want on the house and whether you have multiple policies like with a car or jewelry coverage. I'll have one client buy a $300k house with a $850 a year policy and another buyer buying a $300k house with a $1500 a year policy. It's about age of home and coverage amount.

Online calculators can only tell you an estimated story, but not the actual values...

[rrjr]

To get to the county tax websites, use the following:

Travis - Travis Central Appraisal District
Williamson - Welcome to WCAD
Hays - http://www.hayscad.com

On all 3 sites, you can search by address and see all the taxing entities associated with a property.

-rrjr

[kbchitown]

Property taxes are high in Texas - period .Taxes along with insurance can possibly double your mortgage payment.

There is no simple way to calculate the taxes here except for the more expensive the house = higher property taxes. Each community has their taxing bodies....and certainly is not "one size fits all". I'm sure your brain has gone numb with just the information introduced here. Even our mortgage lender had a hard time determining our taxes! You'll get an idea of what the tax burden will be when you narrow your home search.

There is nothing wrong with Zillow or Trulia.....those figures are in the ball park.

Insurance is a "homeowners insurance" policy and lenders require it. You pick your insurance company (usually the same one you'd use for car, etc.). And in Austin with hail, drought, brush fires, floods....I would highly recommend it.

People tend to have their homeowners insurance and property taxes bundled with their mortgage payment - it's mindless...those things get paid when due. However, you may choose to pay your taxes yourself. And when the home is paid off (or if you paid cash to begin with), insurance and taxes are still your responsibility.

[TexasHorseLady]

What FalconheadWest said about depending on Zillow and Trulia for property values/sold data. They're notorious among those who know the actual facts for being way off the mark because, as said, Texas is a non-disclosure state so they're going on incomplete/flawed data in the first place. Plus, Zillow themselves have said that they figure a 50% accuracy rate (!) is awesome for their zestimates. I've seen them be as much as $50,000-75,000 off both ways on sold prices, among other inaccuracies. In states where the information is already public (meaning you could dig it out yourself if you wanted to go to the trouble), they may be more accurate.

[Bobby Davro]

Ok, many thanks for everyone's help.

So If I figure

• 4% of asking price annually to cover insurance & taxes
• Whatever the repayments on the asking price are with the rate I'm getting on a mortgage.

I'll be getting a ballpark figure on repayments, or am I still missing something?

Cheers!

[Trainwreck20]

4% of asking price annually to cover insurance & taxes

That should be pretty close, possibly on the high side.

[Bobby Davro]

Originally Posted by Trainwreck20

That should be pretty close, possibly on the high side.

High is fine. I'd sooner have a high estimate and know the reality is lower than the opposite way.

Thanks!

[mrkk]

4.5% apr of interest rate
and 3% tax

I say pretty close