Post Rona Property Taxes

Gitchi Gummi wrote:

if anyone still happens to be paying PMI, with the jump in property values, it’d be a great time to contact the bank holding your mortgage and get an appraisal done to possibly get rid of the PMI. it depends on the type of bank your mortgage is thru. Some banks allow for a new appraisal to be done to calculate the % of equity in your home and other banks do not give you that benefit and stick with the appraised value at the time you took out the mortgage. Its something worth looking into for anyone currently paying PMI

That is what we did in the fall, and saves us about $120/month. And the Bank ordered appraisal was only $150. Unfortunately I don’t think you can do this on a FHA loan anymore.

I also thought you couldn’t remove PMI on conventional loans either after a certain origination (closing) date, but definitely worth looking into for folks.

Edit: I guess it depends if it’s buyer paid or lender paid. Buyer paid, get it cancelled at 20% LTV. Lender paid, you need to refi.

Typically all it takes is a call to your mortgage company to order the appraisal (usually has to be done thru them). They also require something like 2 years of good payment history.

Different banks will have different rules and it also varies if your mortgage is from a federally chartered lender or state. Federally chartered mortgage companies are regulated under federal law while state chartered are, you guessed it, regulated by state law. Federally chartered lenders do not have to abide by state law.

Federally chartered lenders are not required to take market appreciation into account when determining the value of your home. So you don’t get the benefit of the appreciation of the value of your house.

State law requires Minnesota-chartered lenders to allow a new appraisal to calculate LTV and thus you benefit from market appreciation. Minnesota law says the value of your home is a based on what it would be worth if you sold it in the current market.

If you aren’t sure if your mortgage company is federally or state chartered, one hint a lender is federally chartered is if they have “National” or “National Association” in their name (i.e. Wells Fargo Bank, N.A., National Bank of Commerce, First National _____, etc)

FinickyFish wrote:

I also thought you couldn’t remove PMI on conventional loans either after a certain origination (closing) date, but definitely worth looking into for folks.

We bought our home July 2018 and were able to remove PMI in 16 months on a conventional. We did pay more down at purchase and per month but were still away from 20% when they removed the PMI. I was surprised by how easy it was. Our refi and removal of PMI took 6.5 years off our loan when all was said and done.

Doing a refi is out of the question now. I feel bad for the first time home buyer’s reading this post. I do!! It’s a bad time to get into the game right now and no one tells them this.

Look into your PMI. Anyone paying it should address this with their lender. Even if your FHA. I was always told you could not remove PMI on an FHA loan but would still call and ask about it. PMI is a rip off.

Not sure why all the doom and gloom of interst rates. If ya need a house ya need a house, refi when times are right. Historically speaking many would’ve liked very much for a 6-7% interest rate. Fair deals dor homes to be had if you don’t jump on the overpaying bandwagon.

FG just got bought one and closing in couple weeks at 6%.

My value went up 20%, taxes 13% here in the mpls. They not only have PT refund but there’s a special credit to get if they raised over 12% as well, unsure what that amounts to but I’ll take it

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It’s not so much doom and gloom and the world is ending… I think most people are just disappointed in their decreased purchase power with higher interest rates.

For example, let’s say you could afford a monthly payment of $2,000… and for simplicity sake for this example, that’s just P&I and not taxes, PMI, insurance, HOA, or anything like that.

A couple years back, that $2,000/month payment could buy you a $446k mortgage at 3.5% interest rate on a 30 yr fixed. Fast forward to now and that $2,000/month payment can buy you a $291k mortgage on the same 30 year fixed. Combo that with increased property values and it is incredibly harder to “move up” in house these days without increasing your monthly payment by an absurd amount.

Yeah the rate hikes are a real problem. Theyve bumped up at least 4 times in just the last 6 months. The interest rate for my new truck went from a potential 4.9 to 7.9 in 3 months.

9 total interest rate hikes across 2022 and 2023 so far for a total increase of 475 basis points to the target fed funds rate. Ya… that is for sure going to move things a bit

Deuces wrote:

My value went up 20%, taxes 13% here in the mpls. They not only have PT refund but there’s a special credit to get if they raised over 12% as well, unsure what that amounts to but I’ll take it

I just did my return and our taxes went up 13%, that special credit was a whopping $22 we get back…..

Gitchi Gummi wrote:

9 total interest rate hikes across 2022 and 2023 so far for a total increase of 475 basis points to the target fed funds rate. Ya… that is for sure going to move things a bit

Yikes worse than I thought.

Becker County has been pretty fair, valuations are well under comparable sales. I saw 10-20% valuation bumps over the past couple years and taxes are up 4-5%. I would say they are fair on tillable also, which is shooting up and squeezing out any local producer looking to add ground. My MIL in Illinois is paying 3x what I pay on a house that is worth maybe 50% less, so I feel like I am getting a decent deal, especially considering the huge cost increases the county is facing and all the major investments they are making to improve the county.

i know this isnt really a cost of living conversation but i was thinking about this the other day. My mom rented a 2 bedroom apartment in Osseo MN in 1991 for $450 a month. She lived there on and off for the better part of 15 years. The rent never went higher than maybe $800 toward the end. I think i looked up a place there a few months ago and a studio was over $1200.

As some others have said i do feel for those just starting out in life. Homes cost too much, loans cost too much and renting costs too much

sad but true, crappie

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I tend to view property taxes as a tax that you should (in theory) receive maximum return value – because the vast percentage of the tax money you pay is spent where you actually live.

If you do not believe the county, city, or school district spend your money wisely get involved … vote, run for office, work with others that have the same position.

When I look at our property tax (up about 8% largely due to property valuation increase – which it did) … I see the following

About 50% goes to the School District (regular and levy)
About 25% goes to the County
About 20% goes to the City
About 5% goes to Met Council or watershed district

I am not sure I have ever been eligible for any type of poperty tax relief… certainly not now

Gimmi …

Not sure there is a public 4 year university or college under $17K (WI or Dakotas) or under $22K in Minnesota if you add in the true costs (tuition, plus all the added fees) and then add in room and board.

Junior Colleges are a fantastic bargin, but these young people often then miss the moving away from home experience.

Deuces wrote:

Not sure why all the doom and gloom of interst rates. If ya need a house ya need a house, refi when times are right.

Interest rates will drive this housing market down because there is nothing is left to support these values right now beside demand. Everything else is against these inflated home values and there will be a correction. If you are a first time home buyer buying at the top with 3-5 percent down then good luck selling in the near future, planning to refi or removing PMI if you get under water in equity.

Thats all. It happened to many of us back in 2008 and very possible we are going back to a similar pattern.

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Deuces wrote:

Not sure why all the doom and gloom of interst rates. If ya need a house ya need a house, refi when times are right. Historically speaking many would’ve liked very much for a 6-7% interest rate. Fair deals dor homes to be had if you don’t jump on the overpaying bandwagon.

FG just got bought one and closing in couple weeks at 6%.

My value went up 20%, taxes 13% here in the mpls. They not only have PT refund but there’s a special credit to get if they raised over 12% as well, unsure what that amounts to but I’ll take it

Higher interest rates is one thing. Inflated prices and higher interest rates is another.

Brit, it was just a random funny meme I pulled off Google to poke fun at boomers. While the exact numbers aren’t accurate, the general premise is spot on.

Well yes and no …

College tuition is indeed totally out of control … enabled largely by easy loans. Wonder what other market have been impacted by easy loans?

The internet grab while generally true misses …

1) the hardships of the Great Generation (depression and war).

2) the high inflation and extreme interest rates that the early boomers faced in the late ’70s and early ’80s. Today’s interest rates remain below anything seen 1970 – 2000.

3) prior massive blue collar and white collar layoffs tied to recessions. Mobility was more difficult in the past.

At this point … The generally higher salaries, flexible work conditions, and ability to move from job to job has never been greater. No fear of draft or war unless you choose to serve.

There will always be inflation and deflation cycles … especially on property … but generally speaking owning property is most often the right thing to do.

With most home purchases the loan runs 15, 20, or 30 years. The interest paid often exceeds the cost of purchase if the loan runs to a true 30 year term.

Quite a few people were caught in the 2008 – 2014 property price down cycle too… especially if they bought in 2006 – 2008.

Equity grab and parlay drove much of the housing price increases. People took their equity and bought bigger. Fueled most recently by the mantra – I can work from anywhere now.

The other thing that drove housing prices up and I do not believe mentioned here is the real estate investment companies. There are quite a few companies that went in and bought homes as an investment away from the fund markets … they bid up pricing (mainly on entry level homes) and then turned around and rented them or flipped them for a much higher price.

This is where first time home buyers got crushed …
1) no equity – 1st time buyer
2) most of their savings tied up in 401s – often difficult to extract
3) competing with real estate investment groups paying cash

crappie55369 wrote:

i know this isnt really a cost of living conversation but i was thinking about this the other day. My mom rented a 2 bedroom apartment in Osseo MN in 1991 for $450 a month. She lived there on and off for the better part of 15 years. The rent never went higher than maybe $800 toward the end. I think i looked up a place there a few months ago and a studio was over $1200.

As some others have said i do feel for those just starting out in life. Homes cost too much, loans cost too much and renting costs too much

I see both sides of this. Things cannot be compared with validity across generations. Boomers could buy homes for 70-90K and nice vehicles for 10k. College was cheaper, and health insurance was substantially cheaper. Fast forward to today and people starting life on their own are facing exponentially more expensive everything.

For the flip side, ask you mom what she made per hour in 1991. A “good” job might have been 12-15$ an hour (just an off the cuff guess). Last week I just wrote a letter of recommendation for a 17 year old Junior in High School to do his summer work with an underground construction company (boring, splicing fiber, etc). He had the entire job description with him and showed me. $25.40 an hour with no experience necessary. To repeat, this kid is in high school and NOT living anywhere near the metro either. If I made $25 an hour at age 17 without any bills to pay…I’d probably have ended up in jail with my teenage decision making.

There are opportunities for every generation as well as hardships and tough situations. The beauty is that nothing stays the same for long.

[/quote]
I see both sides of this. Things cannot be compared with validity across generations. Boomers could buy homes for 70-90K and nice vehicles for 10k. College was cheaper, and health insurance was substantially cheaper. Fast forward to today and people starting life on their own are facing exponentially more expensive everything.

For the flip side, ask you mom what she made per hour in 1991. A “good” job might have been 12-15$ an hour (just an off the cuff guess). Last week I just wrote a letter of recommendation for a 17 year old Junior in High School to do his summer work with an underground construction company (boring, splicing fiber, etc). He had the entire job description with him and showed me. $25.40 an hour with no experience necessary. To repeat, this kid is in high school and NOT living anywhere near the metro either. If I made $25 an hour at age 17 without any bills to pay…I’d probably have ended up in jail with my teenage decision making.

There are opportunities for every generation as well as hardships and tough situations. The beauty is that nothing stays the same for long.
[/quote]

True. My parents just divorced and their company went bankrupt as did they (filed bankruptcy). My mom took a job working overnights in a mailroom for moneygram (entry level position). She just had a high-school diploma and only work experience was as a bank teller so she didn’t make much money.

I dont have facts about today’s world vs 1991 but I gotta think that if this situation played out today, as opposed to 1991, what my mom was able to do with her circumstances wouldn’t be possible.

But yeah I agree comparisons across generations are not easy comparisons to make and its never apples to apples

buckybadger wrote:

For the flip side, ask you mom what she made per hour in 1991. A “good” job might have been 12-15$ an hour (just an off the cuff guess). Last week I just wrote a letter of recommendation for a 17 year old Junior in High School to do his summer work with an underground construction company (boring, splicing fiber, etc). He had the entire job description with him and showed me. $25.40 an hour with no experience necessary. To repeat, this kid is in high school and NOT living anywhere near the metro either. If I made $25 an hour at age 17 without any bills to pay…I’d probably have ended up in jail with my teenage decision making.

Haha yeah I took a semester off of college spring of 2003 and worked in Gillette, WY cleaning parts for broke down wheel motors on coal hauling trucks. Made $15/hour plus time and a half over 40 hours, and $30/hour over 50 hours, and most weeks worked between 50-70 hours. Sure I was covered in chemicals and worked 10+ hour shifts in a respirator but I thought I was ROLLING in money, and lived as a 20 year old with too much money might. Quickly realized that was not sustainable for a number of reasons for me! Also realized the importance of properly fitted ventilator masks for aerosol chemicals, but that is another discussion…