California Taxes and Insurance

The standard rule for estimating monthly property tax and hazard insurance payments
for a purchase transaction in the state of California are as follows:



Taxes = Purchase price X .0125 / 12

Hazard Insurance = Total Loan amount X .0035 / 12.



Example 1 - Purchase price = $500,000. Loan amount = $400,000.



Taxes = $500,000 X .0125 / 12 = $520.83/mo

Hazard Insurance = $400,000 X .0035 / 12 = $116.67.



Another Example (1st and 2nd). Purchase price = $500,000. Loan amounts = $400,000
1st and $50,000 2nd.



Taxes = $500,000 X .0125 / 12 = $520.83/mo

Hazard Insurance = ($400,000+$50,000) = $450,000 X .0035 / 12 = $131.25/mo

I figured this could help some with figuring out numbers :)

Scott Gormley
Broker/Owner
Oak Valley Mortgage
2006 Chico Assoc. of Realtors Affiliate Chairman
Direct: 530.592.8362
Fax: 530.267.5555
Website: http://www.caloan.com/

Blog: http://activerain.com/blogs/lendingmagician

"You find the perfect home, we'll find the perfect loan!"