“It’s
important
to
look
beyond
the
sticker
price
and
understand
how
taxes
and
insurance
will
shape
your
monthly
payment,”
said
Jake
Vehige,
president
of
mortgage
lending
at
Neighbors
Bank.
“They’re
recurring
costs
that
need
to
be
planned
for
from
day
one.

Homebuyers
who
don’t
account
for
them
upfront
can
be
caught
off
guard
when
their
monthly
payment
is
higher
than
expected
or
rises
over
time,
and
these
costs
can
become
burdensome
for
any
homeowner
as
they
increase.”

In
some
markets,
taxes
and
insurance
make
up
more
than
one-third
of
a
typical
monthly
mortgage
payment,
leaving
less
of
the
borrower’s
budget
for
principal
and
interest.

Metro-level
breakdown

Illinois
and

Florida
account
for
many
of
the
highest-burden
metro
areas,
but
for
different
reasons.

In
Illinois
metros
such
as
Decatur,
Peoria
and
Rockford,
relatively
high
property
tax
rates
drive
up
monthly
payments,
even
where
home
prices
are
moderate.
In
Florida
markets
like
Pensacola
and

Miami-Fort
Lauderdale-West
Palm
Beach,
rising
homeowners
insurance
premiums
tied
to

hurricane
and
flood
risk
significantly
increase
costs.

Among
the
top
10
highest-burdened
markets,
Pensacola-Ferry
Pass-Brent,
Florida,
ranked
No.
1,
with
taxes
and
insurance
accounting
for
43.6%
of
the
average
monthly
mortgage
payment.
The
typical
monthly
principal
and
interest
payment
was
$1,531,
while
taxes
and
insurance
added
$1,183,
bringing
the
total
to
$2,714.

Other
high-burdened
markets
included
Decatur,
Illinois,
where
taxes
and
insurance
made
up
37.4%
of
the
average
payment,
and
Massena-Ogdensburg,
New
York,
at
36.5%.

The
Miami
metro
area
ranked
seventh.
In
that
region,
the
average
monthly
principal
and
interest
payment
was
$2,383,
with
taxes
and
insurance
adding
$1,244
—
about
34.3%
of
the
total
$3,627
payment.

By
contrast,
in
some
of
the
nation’s
most
expensive
housing
markets,
taxes
and
insurance
represent
a
relatively
small
share
of
monthly
payments.

Urban
Honolulu
ranked
lowest,
with
taxes
and
insurance
accounting
for
just
9%
of
the
average
monthly
payment.
The
typical
principal
and
interest
payment
was
$4,243,
compared
with
$420
for
taxes
and
insurance.

Hawaii’s
low
property
tax
rates
and
relatively
stable
homeowners
insurance
premiums
contribute
to
the
smaller
share.
Unlike
many
states,
Hawaii
relies
more
heavily
on
other
revenue
sources
to
fund
schools
and
public
services,
helping
keep
property
taxes
low
even
as

home
values
remain
high.

Other
metros
with
low
non-mortgage
costs
included
Morehead
City,
North
Carolina;
St.
George,
Utah;
Heber,
Utah;
and
Grand
Junction,

Colorado,
where
taxes
and
insurance
generally
accounted
for
about
9%
to
10%
of
monthly
payments.

The
report
also
noted
that
rising
tax
and
insurance
costs
can
surprise
homeowners
over
time
—
particularly
if
they’re
a
first-time
buyer.

Many
buyers
use
low
down-payment
loans
backed
by
federal
programs
such
as
the

Federal
Housing
Administration
(FHA),

U.S.
Department
of
Agriculture
(USDA)
or

U.S.
Department
of
Veterans
Affairs
(VA).
These
loans
typically
require

escrow
accounts
that
bundle
property
taxes
and
insurance
into
the
monthly
mortgage
payment.

As
a
result,
even
borrowers
with
fixed-rate
mortgages
may
see
their
monthly
payments
change.

“Many
homeowners
assume
their
payment
will
stay
the
same
each
year,
but
even
if
your

mortgage
rate
doesn’t
change,
taxes
and
insurance
often
do,”
Vehige
said.
“While
you
can’t
control
rising
costs,
reviewing
your
escrow
statement
for
shortfalls,
shopping
for
insurance
annually
and
understanding
how
to

appeal
your
property
taxes
can
help
prevent
surprises
and
keep
your
budget
on
track.”