The window envelope comes from your Municipal Tax Assessor’s office. Your muscles tense. Your thoughts focus. Wasn’t the mortgage company suppose to handle property tax stuff? Who needs another bill. Your adrenaline has kicked in to help you face this “threat.” It sharpens your focus.
We nervously open the envelope. Its contents scream in large font across the top “THIS IS NOT A TAX BILL.” Relief washes over us as we put the paper down. This is one of the biggest mistakes that homeowners make. Because if you take the time to read and understand this form you will reduce the amount of taxes you pay on your home.
First year homeowners those who bought in 2017 should pay special attention. If this is the first year owning your home then one of the most important things you can do is to make sure that your property is properly assessed the first year of ownership. Transfer of Ownership is a major taxable event in MIchigan. Transfer of Ownership includes not only purchases but inheritance, divorce, probate, etc.
Ignoring this can cost you thousands of dollars over the life of your home ownership. This will be the only time that your state equalized value (SEV) will be the same as your taxable value. It will greatly impact your cost of ownership due to the “pop-up tax.”
You want your taxable value to start out as low as possible. The only way to get it done is to appeal your property tax assessment. The good news is that it's not hard to do. Since you just bought the house, you probably have all the documentation you need to make an effective appeal.
A good credit score is not enough to be mortgage-ready
Yes, you need a good credit score. Just as important is your debt-to -income ratio. Your debt to income ratio tells a lender how close you are living to the edge. It is known as DTI.
DTI measures the percentage of your gross monthly income is used to service certain debt types.