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Old 06-21-2012, 07:29 PM
 
12 posts, read 34,861 times
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Hello, I'm considering buying a house instead of renting (that is, if I can buy a house the way it has been described it's hard to find one without a bidding war here! makes me sad). That said, I'm curious about the tax rate for a house and what I should expect to pay in insurance. I did some online calculators and it didn't add up to what someone was telling me I should expect to pay. So, in short, anyone care to tell me how much they pay per month (or year) in city taxes for their house and what insurance costs them? I'm aiming for a small house, 2 bed something like 40K. Thanks.
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Old 06-22-2012, 06:22 PM
 
214 posts, read 614,761 times
Reputation: 196
Quote:
Originally Posted by perfectdisplay View Post
Hello, I'm considering buying a house instead of renting (that is, if I can buy a house the way it has been described it's hard to find one without a bidding war here! makes me sad). That said, I'm curious about the tax rate for a house and what I should expect to pay in insurance. I did some online calculators and it didn't add up to what someone was telling me I should expect to pay. So, in short, anyone care to tell me how much they pay per month (or year) in city taxes for their house and what insurance costs them? I'm aiming for a small house, 2 bed something like 40K. Thanks.
It's simple. Unless you're buying a distressed property (foreclosure), you will pay whatever the millage rate is in the municipality you're looking in (mills are $ per thousand dollars of value), and that value is the SEV (state equalized value) of the property, which will be set at 50% of the purchase price (or FMV - fair market value, again, if it's a distressed sale).

So, if you live in an area with 45 mills as the local tax rate, and you buy a house in an "arms length" transaction (not distressed), your SEV will be $20,000, at $45 per thousand, or $900 per year. Expect to pay approximately 2/3 in your "winter" taxes and 1/3 in your "summer" taxes. Also, your tax increases will be capped to a certain % per year (so be weary when purchasing a home that someone has lived in for 30 years when they tell you what their taxes are).

Homeowner's insurance is fairly cheap in MI unless you live in a flood zone, as we are not prone to hurricanes, earthquakes or tornadoes. For a house with an FMV of $40k, expect to pay around $4-600 per year (depending again upon the area).

If you have a mortgage, they will likely require escrow, so take the $900 per year property tax and the (say) $500 per year homeowners, for a total of $1,400, which would add approximately $117 to your monthly P&I (principal and interest payment). They'll also probably ding you for 6 months worth of escrow at closing to make sure you "stay ahead."
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Old 06-23-2012, 07:08 PM
 
Location: Grand Rapids Metro
8,872 posts, read 17,741,219 times
Reputation: 3833
Quote:
Originally Posted by caspper69 View Post
It's simple. Unless you're buying a distressed property (foreclosure), you will pay whatever the millage rate is in the municipality you're looking in (mills are $ per thousand dollars of value), and that value is the SEV (state equalized value) of the property, which will be set at 50% of the purchase price (or FMV - fair market value, again, if it's a distressed sale).

So, if you live in an area with 45 mills as the local tax rate, and you buy a house in an "arms length" transaction (not distressed), your SEV will be $20,000, at $45 per thousand, or $900 per year. Expect to pay approximately 2/3 in your "winter" taxes and 1/3 in your "summer" taxes. Also, your tax increases will be capped to a certain % per year (so be weary when purchasing a home that someone has lived in for 30 years when they tell you what their taxes are).

Homeowner's insurance is fairly cheap in MI unless you live in a flood zone, as we are not prone to hurricanes, earthquakes or tornadoes. For a house with an FMV of $40k, expect to pay around $4-600 per year (depending again upon the area).

If you have a mortgage, they will likely require escrow, so take the $900 per year property tax and the (say) $500 per year homeowners, for a total of $1,400, which would add approximately $117 to your monthly P&I (principal and interest payment). They'll also probably ding you for 6 months worth of escrow at closing to make sure you "stay ahead."

45 Mills is pretty high, fyi. Most of the cities and townships in this area are between 25 - 30 mills.

For a $40,000 house in the city of GR, the OP is probably looking at about $550/year in property taxes.
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Old 06-24-2012, 07:07 PM
 
214 posts, read 614,761 times
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Quote:
Originally Posted by magellan View Post
45 Mills is pretty high, fyi. Most of the cities and townships in this area are between 25 - 30 mills.

For a $40,000 house in the city of GR, the OP is probably looking at about $550/year in property taxes.
I figured. I live in East Lansing where the millage rate is outlandish. It's slightly less-worse with the homestead exemption, but they've gotta tax those rental owners!
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Old 06-25-2012, 10:10 AM
 
Location: Grand Rapids Metro
8,872 posts, read 17,741,219 times
Reputation: 3833
Quote:
Originally Posted by caspper69 View Post
I figured. I live in East Lansing where the millage rate is outlandish. It's slightly less-worse with the homestead exemption, but they've gotta tax those rental owners!
Ah yes, and I am saying 25 - 30 for someone's primary home in this area.
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Old 06-25-2012, 03:52 PM
 
Location: Grand Rapids
235 posts, read 460,161 times
Reputation: 125
Depending on where you are looking, the city, township, or county should have that information (yearly taxes, anyway), often online. I usually look up the website and type in the exact address of the house.
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