Some Details On Taxes And Insurance
The taxes charged in Florida are called ad valorem because the amount
is based upon the 'assessed' value that the county Property Appraiser's
office establishes. As a general rule, this assessed value is supposed
to be about 85% of the market value; thus, a property with a market
value of $100,000 would be assessed at $85,000. If the property
is occupied by the owners as of January 1st of a given year, and
proper filing procedures have been followed, then the taxed value
for that year would be reduced by $25,000; so the taxed value in
this example would be $85,000 - $25,000 = $60,000. Note: This $25,000
reduction in taxed value is called the Homestead Exemption. The
tax is then calculated by multiplying the taxable value times the
number of "mils", where one mil is one-tenth of one
percent (.001). In Okaloosa, Santa Rosa, and Walton counties this
mileage rate varies from about 14 to 20, which means 1.4% to 2% of
value. This range of tax rates would result in taxes from $1,400 to
$2,000 on $100,000 of taxed value (as distinguished from
$100,000 in total market value). The tax rate used here is 20
mils, to show the probable highest tax amounts. The average is about
16 mils (1.6%).
The amount for homeowner's insurance will vary
based upon primarily three things: 1) location 2) type of construction,
and 3) the company selected by you, and, occasionally, a fourth
item, namely your credit history. However, using .5% ($5 per
thousand) of the price is a pretty good estimate. So, in this
example, .5% of $100,000 is $500/yr., or $41.67 per month - and
monthly deposits for insurance are rounded to the next higher
dollar, in this case to $42/mo. Note: the full sales price is
not always insured; however, for payment estimating purposes,
I suggest using it.
Staying with the $100,000 example, and assuming
a loan of $95,000 at 8.5% for 30 years, the total payment would
be calculated as follows (EXCLUDES mortgage insurance - see below.)
|
Principal and interest.......( 7.69 x 95 ) $730.55 Taxes.......$100.00 Insurance.......$ 42.00 Total.......$872.55 |
Example: $85,000 purchase price, conventional loans of $80,750 (95%) and $76,5000 (90%), and VA loan of $86,700 (100% loan plus the VA Funding Fee of $1,700); in all cases the rate is 8.0%, fixed rate for 30 years.
TAX CALCULATIONS: $85,000 |
INSURANCE: $85,000 | ||
| x 85% | x .5% (1/2%) | ||
Equals taxable value of....................$72,250 |
$ 425 | ||
Less Homestead exemption.............$25,000 |
|||
Equals taxed value of.......................$47,250 |
$425/yr = $35.42/mo., | ||
| 47,250 x 2% (20 mils tax rate) = $945 | rounded to $36/mo. | ||
| $945/year, $78.75/mo., rounded to $79/mo. | |||
TAXES = $79/MONTH; INSURANCE = $36/MONTH
PRINCIPAL AND INTEREST CALCULATIONS:
| Conventional | Conventional | |
| $80,750 loan (95%) | $76,500 loan (90%) | |
| ------------------ | ------------------ | |
| 80,750/1,000 = 80.75 | 76,500/1,000 = 76.5 | |
| 80.75 x 7.34* = $592.71 | 76.5 x 7.34* = $561.51 |
| VA |
| $86,7000 loan (VA) |
| ------------------ |
| 86,700/1,000 = 86.7 |
| 86.7 x 7.34* = $636.38 |
*This is factor per thousand for 8% loan; see Payment Calculation Tables.
SUMMARY OF TOTAL PAYMENTS:
| --Conventional-- | VA | ||
| $80,750 (95%) | $76,500 (90%) | $86,700 | |
| Principal and interest | $592.71 | $561.51 | $636.38 |
| Taxes | $ 79.00 | $ 79.00 | $ 79.00 |
| Homeowner's insurance | $ 36.00 | $ 36.00 | $ 36.00 |
| Mortgage insurance |
$52.00 |
$33.00 | $ N/A |
| ------- | ------- | ------- | |
| Total payment | $759.71 | $709.51 | $751.38 |
Note that, even though the conventional loan is $5,950* less than the VA loan, the payments are slightly higher than those for the VA loan. The reason is because of the mortgage insurance payments.
*due to down payment requirement of $4,250, and VA Funding Fee of $1,700 added to the loan.