Is assessed tax value a factor getting a mortgage?

[BoBromhal]

Originally Posted by GoPhils

Obviously depends on the state, but I feel like if it's not, it should be. But I think the only scenario where it should be is if the assessed value is well below the market value and it should be reasonably expected that it will increase significantly within a few years. Because depending on how much room the buyer has to qualify, a big jump in the tax bill could make the mortgage unaffordable.

you raise a good point for those on the edge of qualification.

but it's also municipality-specific. Many places re-assess every year. The chance of a huge boost to tax value are slim.

But take where I live, with 8-10 year re-assessments. Say you pay $700K true market value for a house now that is assessed at $500K. Next year, the assessment catches up. Even if the property tax rate is 2%, your payment would increase about 10%.

And that assumes no offset in the rate. In my county, they adjust the rate to be close to revenue-neutral. I can't imagine increasing a budget by 30-40% simply from a revalue.

[GoPhils]

Originally Posted by BoBromhal

you raise a good point for those on the edge of qualification.

but it's also municipality-specific. Many places re-assess every year. The chance of a huge boost to tax value are slim.

But take where I live, with 8-10 year re-assessments. Say you pay $700K true market value for a house now that is assessed at $500K. Next year, the assessment catches up. Even if the property tax rate is 2%, your payment would increase about 10%.

And that assumes no offset in the rate. In my county, they adjust the rate to be close to revenue-neutral. I can't imagine increasing a budget by 30-40% simply from a revalue.

Maybe more like 20%, but I think that just happened outside of Charlotte - https://www.statesville.com/news/loc...9aef0301a.html

That actually inspired my thread about tax rates on the Charlotte board. I was looking at a few houses in that county and was shocked at how high the property taxes on some of them were - come to find out they did a reval and didn't lower the rates.

Edit: Also could be wrong here but I believe I've seen instances where newly built homes were assessed at closer to the land value for a bit after they've been built, and then at some point the assessment is changed to more accurately match the value.