I have written quite a few articles on this but it keeps coming as the buying activity increases. Buyers BEWARE - make sure your lender from San Diego, Orange County, USAA, Navy Federal, etc all understand that many of the houses here are not at 1.25% property taxes. This is the default numbers lenders use to qualify you. Many times the property taxes are 1.8%+ and that can really change what you can afford to buy!
Most homes from 2002 and on often have special assessments for school districts, water districts, etc. When the market was booming previously, they passed these expenses on to the homebuyer as bonds. They run with the property for 25 years+. When rates are so low and you can borrow $10,000 for every $50 you pay per month, this can have a dramatic impact on your purchase power.
I strongly recommend you have your lender safely qualify you at 1.8% as a median. Give a little wiggle room and always account for HOA as well. When you get qualified they are basing your purchasing power on your monthly payment. If you have a $180 Greer Ranch HOA or $100 Chardonnay Hills Temceula HOA, plus higher taxes, you may not be able to buy that home. This can be very frustrating for buyers and I make sure that everyone of mine knows this in advance so we can make the buying experience a joy versus a nightmare.
I have so many new buyers that want to live in Harveston in Temecula. That is a serious financial committment because of the 1.9% tax rate and $180+ HOA. It is a fantastic community but location costs are significant. Communities such as Temeku Hills (1.25%) and Chardonnay Hills (1.20%) or even Paseo Del Sol (~1.6%) are much better situations.
This same situation is often repeated in Murrieta, Menifee, Wildomar and Winchester or French Valley. If you have a good agent, do your homework, you will really be surprised at how much difference this can make. It literally can me buying a $400,000 home versus a $330,000 home is some of the high tax tracts. If you ever have any questions, my staff and I will be happy to help!
Sincerely,
Stefan West, Broker
West Realty - www.stefanwest.com
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