It is extremely important to understand additional Murrieta and Temecula property taxes better known as special assessments or mello roos.

Property taxes in Murrieta and the surrounding areas of Menifee, Wildomar, Winchester and Temecula can really impact your buying power.  Back in 2002 home builders, recognizing the incredible buyer demand in real estate, started passing on fees in the form of tax bonds for things such as lights, sewer, and especially school districts. These fees are a fixed dollar amount and are usually limited to 25-35 years.  However, often the can also run in perpetuity or they never end.

Show Murrieta Property Taxes and Special Assessments

Selecting your next home should absolutely involve understanding and then calculating Murrieta or Temecula property taxes. Once you start calculating, it very well could change what neighborhood or community you choose to purchase in.  There are some communities such as Spencer's Crossing in Winchester (2.2%) or Greer Ranch in Murrieta (1.9%) that have very high combined taxes when including special assessments.  

On the other hand, there are other Murrieta and Temecula areas such as Montserrat or Chardonnay Hills that have property tax rates that are less than 1.20%.  The difference on a $425,000 home between a 2% and 1.20% property tax rate is $8,500 - 5,100 = $3,400 per year or $283 per month!  That is for the same price home.

Now to explore further, for every $10,000 you borrow from a bank (at these low interest rates) it costs you about $70 per month.  Buying a home at $410,000 will cost you roughly $70 more per month than buying at $400,000.  So, the difference of $283 per month is really a difference of $40,000 ($283 divided by $70) in purchase price at current interest rates.  Would you rather by that brand new Winchester or Menifee builder home at $425,000 or would you prefer an older Murrieta pool home at $465,000 for almost EXACTLY the same monthly payment?

Knowing Temecula, Murrieta, Menifee, Wildomar, and Winchester property taxes is also important because of your loan qualification or approval.  Most lenders, especially those our the area in San Diego or Orange County, run your estimated property taxes at 1.25%.  That is the default of most mortgage and refinance quoting programs. If you have an approval for $400,000 but choose an area of high special assessments, you really can only afford something like $360,000 in that area. Your actual monthly payment with the increased taxes is the same as a $400,000 house with lower taxes.  You will not be qualified for a $400,000 with a higher tax rate because it takes you over your approved Debt to Income (DTI) ratio.  I would hate for a client to fall in love with an area and home they didn't realize is outside their approval.

Lastly, knowing your different Murrieta communities and specific Temecula neighborhood tax rates can help you get the best deal for today and the long term. Frankly, it is easier to sell a home with lower tax rates as everyone can buy it since it falls in line with their loan approval without adjustments. You also may decide to view older homes with more upgrades due to tax rates and find a true gem. However, new homes in Murrieta, Temecula, and Winchester are very popular right now and can be a great choice depending on your goals for your family.  Whatever your decision at least understanding higher property taxes will help you make a fully informed decision versus getting a rude shock 20 days into escrow.