How to Calculate Property Taxes Into Your Monthly Mortgage

Before you decide to make a bid on a house, you may want to estimate the monthly payments to see if you can afford the house payment, insurance and property taxes. The house payment may or may not include escrow for property taxes. Even if the property taxes are not included in your monthly mortgage payment, you still need to save that money so that you have it at the end of the year to pay the taxes as required by your local government.

Difficulty:

Moderately Easy

Instructions

Things You'll Need

• Yearly property tax amount
• Calculator

1. Call your clerk of courts or county treasure to find out what your yearly property taxes are.

2. Use a calculator to determine what the monthly tax will be by dividing the total tax by 12 months. For instance, if your yearly tax is $2,349, you would divide 2,349 by 12 for a monthly total of $195.75.

3. Combine your mortgage payment, monthly insurance payment and the monthly property tax to determine what your monthly total is for owning your home. For instance, if your monthly mortgage is $565, insurance is $35 and the property tax is $195.75, your total monthly liability will be $795.75. Note: Property taxes can change each year, so you might need to add a few extra dollars at the end of the year or it could be a few dollars less.

References

• Home Buying Guide Page 25