Taxes in Miami (loan, interest rate, escrow, real estate)

[23yr_home_buyer]

Hello,

I’m 23 and looking to buy my first condo next month. I have already been approved for a mortgage, seen the model, and talked to the real estate agent. My next move is to put the $$ down to hold the unit the let my lawyer take a look at the contract.

I know people that pay property taxes annually, but I don’t know really how that works, or where to find information or how much that would be.

On the estimate from the mortgage company, there is a cost for "taxes" in my mortgage payment a month. Is that all the taxes I pay, or is there a tax I pay annually as well?

My first time buying, and i want to be well informed before I get in over my head.

Any information is helpful.

thanks

[doggiebus]

Its probably in your morgage payment, and thats all you pay in taxes. The best way to figure it out is its 2% of the sale of your place. And If you qualify for Homestead exception you get 25k off the sale price, and then 2% of that number is your tax cost. So for instance a $200,000 home that doesn't qualify for Homestead exemption will pay around $4,000 in taxes. If they qualify for homestead excemption, it will be around $3,500.

[bale002]

I would advise you not to sign anything at all until you receive some objective analysis not only of taxes, but of the real estate market in Miami/Dade in general - and not from a real estate agent, lawyer, the seller, some journalist, or some mainstream economist, Moderator cut: insults are not nessesary

But, to answer your question, in Florida the rule of thumb is that your annual property tax is around 2% of the purchase price. So if you are paying $300k for the condo, your annual tax bill will be in the neighborhood of $6,000. Now, how that is calculated into your monthly mortgage bill is another question.

More specifically, the county property tax assessor sets the taxable value of your property each year, supposedly in line with market prices, minus a $25k homestead exemption if you are a full-time Florida resident and declare a homestead, and then your tax is will be a certain percentage of that assessed value. The percentage, known as millage rate, in Florida can vary from like 1.6% (expressed as 16 I believe) and up to 2.5%. I believe that the Dade millage rate is on the high end, so around 2.25%-2.50%.

If you have homestead protection, your assessed value cannot increase by more than 3% in any one year. However, millage rates can be changed.

Good luck!

[23yr_home_buyer]

Wow, good feedback. (And I’m a woman by the way : )

I have another question. Any suggestions on how to use a condo; or should I say the equity in a condo; to get rid of a high interest a student loan?

[bale002]

Originally Posted by 23yr_home_buyer

[color=black]Wow, good feedback.
I have another question. Any suggestions on how to use a condo; or should I say the equity in a condo; to get rid of a high interest a student loan?

In theory, you could take out a home equity loan at an interest rate of around 7% which would be convenient assuming that your student loan rate is higher.

In practice, it really depends on the financial details of the condo purchase: is the purchase price below current comparables, what percentage of down payment, your monthly expenses compared to income?, etc.

The best thing would be to go into your own, economically productive, business. In that case, you can explore the tax code for ways to optimize your financial situation.

In any case, good luck!

[randian]

Originally Posted by bale002

If you have homestead protection, your assessed value cannot increase by more than 3% in any one year. However, millage rates can be changed.

Which makes "homestead" worthless in real terms. Since the tax is value X rate, if you can change the rate to be anything you want limiting value doesn't limit your taxes at all.

[mbmouse]

Hello,
Seeing as this question is really more about how a mortgage and escrows work, You will get better answers in the mortgage forum, so moving it there for you.
Good luck on your move.

[renriq02]

Make sure to take in account the monthly HOA fees for the Condo.
They range from 150-300 per month.

I would talk to the tax rep before trying to refinance for student loans.

student loans are tax deductible....so there may not be a great advantage of consolidating EXCEPT that you will turn a 5-10yr plan to a 30yr fixed plan.

you maybe paying more for that student loan if you decided to roll it in to your mortgage.