Home Buying Kit For Dummies. Eric Tyson
www.dummies.com/go/homebuyingkit7e) to track your estimated homeownership expenses, starting with the mortgage payment:
| Item | Estimated Monthly Expense |
| Mortgage payment | $ |
| Property taxes | + $ |
| Insurance | + $ |
| Improvements, maintenance, and other | + $ |
| Homeownership expenses (pretax) | = $ |
| Tax savings | – $ |
| Homeownership expenses (after tax benefits) | = $ |
Property taxes
If you live and breathe, escaping taxes is darn near impossible. When you buy and own a home, your local government (typically through what’s called a county tax collector’s office or an equivalent for your local town) sends you an annual, lump-sum bill for property taxes. Receiving this bill and paying it are never much fun because most communities bill you just once or twice per year. And some homeowners find it aggravating to be paying so much in property taxes on top of all the federal and state income and sales taxes they pay. In case you’re wondering, property taxes go toward expenses of the local community, such as the public schools and snow plowing (for those of us foolish enough to live where the winters are cold). Especially in higher-cost areas with few retail and commercial properties paying taxes, residential property taxes can be quite significant.
Should you make a small down payment (typically defined as less than 20 percent of the purchase price), many lenders insist on property tax and insurance impound accounts. These accounts require you to pay your property taxes and insurance to the lender each month along with your mortgage payment.
Be careful to make sure that you’re comparing apples with apples when comparing communities and their property taxes. For example, some communities may nickel-and-dime you for extra assessments for services that are included in the standard property tax bills of other communities.
| Item | Estimated Monthly Expense |
| Mortgage payment | $ |
| Property taxes | + $ |