Commute time and property tax

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  • #73467
    Korentul
    Participant

    Hello all,

    Is there a limit to how far you can commute to a potential home? I’m looking at a house that is about an hour and a half to an hour and 45 commute to my job. Will this be an issue?

    Also, is there a limit to how much our yearly property tax burden can be? I saw a video from a youtuber saying that it was 5k per year, but the home I’m looking at will be 10k per year.

    Any help would greatly reduce my anxiety.

    Thanks!

    #73470
    Nelsont
    Member

    No and no.

    The only limit is your monthly affordability and if you are a non priority member you have to purchase in a targeted area.

    #73475
    TTrumble
    Member

    Hello Korentul,

    You will have to answer some quesstions regarding that long a communte time. That is an extreme commute and you will need to explain why you are choosing to buy there rather than someplace considerably closer. The problem is that’s a sign that the buyer may be trying to use the NACA program to buy an investment property rather than their primary place of residence and is trying to pull the wool over our eyes.

    You’ll will need to provide a practical explanation why you are plannong to buy in that specific area so far from your workplace.

    The amount of taxes are not capped, but higher taxes will translate into a smaller purchase price. Remember that NACA qualifies you for an affordable monthly payment amount, not a specific mortgage amount. We then back out taxes and insurance and the remainder is the amount avaiable to go toward princple and interst each month. Therefore, higher taxes mean a lower principle amount each month, and a lower maximum purchase price as a result.

    Tim Trumble
    Online Operations, NACA

    #73477
    Korentul
    Participant

    Thank you for the responses. That area is the only place building new homes to the spec that my family wants and for a great price. The price of homes is lower the further away you go from NYC, which is where I currently live, and although the commute is long, the home is on a Parkway that hardly ever has traffic.Would that be a good enough reason?

    I calculated the local tax rate and and estimated HOI, and the home falls right into my 31% monthly income as long as the mortgage rates stay the same until I lock in.

    With that said, will naca count the “general tax rate” or the “effective tax rate” of the town against the mortgage ? It’s a difference of 2.3 – 2.0 respectively.

    #73529
    sneakerz4me
    Participant

    I had to submit a LOE for and hour commute distance.

    #78634
    Cwat
    Participant

    Did you have any success in purchasing farther from your place of employment? We’re finding ourselves in the same situation and have a very legit reason to purchase farther away.

    #78680
    TTrumble
    Member

    Hello Cwat,

    Korentul’s reason would most likely be considered valid, but there would have to be some sort of proof of the claim, such as price and tax information on similar properties closer to NYC. It’s not that we don’t understand how things work in the NY/NJ/PA area, but we still need to have proof to back up the explanation when seeking an exception regarding the purchase of a property so far from work.

    Tim Trumble
    Online Operations, NACA

    • This reply was modified 5 months, 1 week ago by TTrumble.
    • This reply was modified 5 months, 1 week ago by TTrumble.
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