How do property taxes affect home affordability?
By Bob Millaway, South Jersey Community Expert & REALTOR®
Property taxes directly impact your monthly housing cost and overall home affordability. A home with a lower purchase price but high property taxes may cost more per month than a higher-priced home in a low-tax town. Lenders include estimated property taxes when calculating your debt-to-income ratio, which affects how much home you qualify for. Always factor taxes into your budget.
Why It Matters
Two homes at the same price can have very different total monthly costs due to property tax differences. Ignoring taxes leads to overestimating what you can afford.
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