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Discussions tagged with 'Increase in Property Tax and Homeowners Insurance on Newly Purchase Home'
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I have an important case scenario that affects senior homebuyers on fixed income. I have multiple similar case scenarios that affect my clients. Let’s take a recent case where Mr. and Mrs. John and Jane Doe purchased a $250,000 new-construction single-family home in Ocala, Florida. Both Mr. and Mrs. Doe are retired on a fixed Social Security income of $4,400.00 per month. They purchased a modest new construction home. The principal and interest (P and I) at 6.75% was $1,592 per month; the annual property tax assessed was $2,100; and homeowners insurance was $800, FHA Annual Mortgage Insurance Premium $111.
Total monthly housing payment: $1,943.
Other monthly expenses: $700 (auto loan, minimum credit card payments)
Monthly income was $4,400, grossed up 15% to $5,060.
Debt-to-Income Ratio was 38.4% front-end and 52.2% back-end.
The homeowner was barely getting by with the above case scenario: What happened is the county increased property taxes to $4,600 annually, and the homeowner’s insurance was increased to $2,500, which skyrocketed their front-end debt-to-income ratio to $45.3% and back-end debt-to-income ratio to 59.2%, which means they are going to be short in paying their monthly housing payment. This type of property tax hike and homeowners insurance increase should not be allowed and should be deemed a predatory practice by the county and insurance companies. My question is the following: Is there a property tax and homeowners insurance cap? What laws and legal remedies are there to protect senior citizens on fixed income? What are realistic solutions there are to help senior homeowners who could no longer afford their homes due to exponential property tax hikes and homeowners insurance increases?
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