Home Owner's insurance ? (Austin: sales, real estate, mortgage)

[faithr]

Hi all,

Is home owner's insurance higher in Austin than let's say Virginia?
I just signed up with Lending Tree to get some quotes on mortgages and they estimated home owner's for 233 a month for a 700 K house. I currently pay @ 700 annually for a house in Virginia that is valued at 600 (or was before the crash). They also estimated the property taxes as much higher than I've seen (about 18K) so maybe the lenders just overestimate?

[jwb123]

Average property taxes are about 3% here. Depending, of course, which city you pick. $18k sounds about right. Property taxes have been discussed at length here, so you can search the forum for more information.

Coming from VA, your benefit will be that there is no state income tax. (It doesn't work out as a benefit if you were coming from a state without state income tax previously).

[faithr]

Jenbar,

I know all about the property taxes (and no state income taxes) but the houses I've looked at have much lower taxes than 18k. Almost everything has been less than 10K. So I am wondering if the lenders' estimate on home owner's was also high. Anybody know?

[jwb123]

What price range are you looking in? If you are spending over $600k, $18k is right on....

[faithr]

So the tax numbers that I see on the real estate websites are what the current owner pays. Presumably that rate rises when the house sells for a higher amount. Is the reporting of the sales figure still voluntary?

[austifornian]

Yes, Texas is a non-disclosure state so reporting the sales price is voluntary. That being said, they are still able to do a reasonable appraisal of your property based on public information. Another trick they will pull when they see a house has been sold is to appraise high. This happened to me personally and I had to use my HUD statement to justify the lower appraisal value that I wanted. I got a better appraisal and they got better data.

[jwb123]

I am not sure that those numbers on the real estate websites take in to account any exemption that property may have. Frankly, I am not sure that is the most accurate number - a mortgage person would be able to calculate your tax amount better, I think.

[Trainwreck20]

The taxes probably assume that the taxing value will be the asking price. The current owner may be paying taxes at a considerably lower value, either due to the actual lower appraisal value, or due to the 10% homeowners appraisal increase cap.

For a conservative hand-wave tax value, assume the (buying price - $15,000) x 0.03. This will pretty much cover you anywhere and be ballpark but on the high side.

For a more accurate approach, go to the county tax site (TravisCAD.org for Travis County) and search the address. You can add up all the tax rates and multiply that by (buying price - $15,000). You will also be able to see what the owners current taxes are based on. Note that the appraised value and the taxable value may be different due to the homeowners exemption that limits the taxable value increase to 10% per year.

[austifornian]

The mortgage person and the title company will be able to give you numbers on the current years taxes and your prorated share of them but going forward it is a crap shoot. Under no circumstances should you base your cost analysis on the current appraisal. You might get lucky and keep your taxes based on that appraisal, it might be that that property has not been assessed for 3 years and is due for reassessment. At the very least you should find out your current tax rates (which can change) multiply by your purchase price and budget for this.

Properties are not assessed every year and are limited to an assessment increase of 10% per year if under homestead exemption. If a house hasn't been appraised for 3 years and housing prices have boomed the taxes on that house could theoretically rise 30% which can be quite a shock.

[faithr]

Thanks all. This is very helpful.
I think I will try to buy the cheapest house that I can as I don't want to be in a bind over property taxes. My taxes in Virginia are @5k and the no state income tax helps but won't cover the difference.