Florida Homeowners - Now Is the Time to Prepare For Homeowner’s Sticker Shock

FLORIDA  
Opinion by:  
E. Eugene Webb PhD

Author: In Search of Robin  

As a Florida homeowner, it's time to begin thinking about the end of the year and property tax, renewal of your homeowner's insurance, and what may happen to your adjustable-rate mortgage payment all in light of the continuing inflation rate escalation.

Property tax

If you've been watching much local or regional TV news lately, you may have seen a couple of news reports about the impending rise in property taxes around the state of Florida.

While Florida does have a state statute limiting the increase in property taxes to 3%, that statute applies generally to existing homesteaded homeowners. Check out this article from the Tampa Bay Times By Emily L. Mahoney: Property taxes rise in Tampa Bay’s hot market, adding to growing home ownership costs.

If you have recently purchased a new home in Florida, your property taxes paid at closing may not necessarily reflect your property tax due in the following year.

Check out this article From AARP Money: Property Taxes Rise in Hot Housing Market.

If you're new to Florida and have just recently purchased a home, it might be a good idea to go to your local county property tax appraiser’s website, put in your address and check out your current property tax status. If you have some questions, be sure to give the property appraisers office a call. Almost universally they are very knowledgeable and helpful.

Also be aware if your home is mortgaged, your financial institution follows property tax levels very closely. Should your taxes change dramatically it will no doubt influence your monthly escrow requirement, which could cause your house payment to rise significantly.

Adjustable-Rate Mortgages

Adjustable-rate mortgages are a financing tool used to save borrowers significant amounts of money in interest rates over the short to medium term of the mortgage.

Often referred to as ARM (Adjustable-Rate Mortgage) these mortgage instruments usually have a fixed term, from six months to ten years for the initial interest rate and when that term expires, the new rate is the current interest rate.

Be sure to check out this article from Investopedia By DONNA FUSCALDO: Adjustable-Rate Mortgage: What Happens When Interest Rates Go Up.

In times like these, when the Federal Reserve is using interest rates to control or help control inflation, and you have an adjustable-rate mortgage where the fixed rate is about to expire, the impact on your monthly mortgage payment can be significant.

Homeowners Insurance

Homeowner's insurance is becoming a major problem for all Florida homeowners. Homeowner's insurance claims have risen dramatically in Florida over the last few years due to a number of circumstances, including climate change/sea rise, level rise, hurricanes and tornadoes, Florida legal statute changes allowing large numbers of lawsuits primarily involving roof replacement, and inflation.

Check out this article from WPTV West Palm Beach By: Mike Trim: Priced Out of Paradise: Here's why home insurance costs continue to rise in Florida. And, also be sure to click on the links in the article.

Many Florida homeowners are receiving notice from their insurance carrier their homeowner’s insurance is being canceled. If your home is financed, your mortgage has a requirement for homeowners’ insurance and in many cases sets limits for that coverage. Most mortgages also have the provision for providing the insurance regardless of cost if the owner fails to comply with this requirement.

There are also a number of areas, especially along the southeastern coast of Florida around the tip of Florida and all the way up through Tampa Bay where many portions of these counties are virtually uninsurable.

The homeowner’s insurance problem in Florida is only going to get worse not better. So, if your homeowner's insurance is coming due in the next few months, you may want to contact your insurance carrier now to get some idea regarding renewal and rates. In any event expect that you will pay significantly more for your homeowner’s insurance at your next renewal.

The Perfect Storm

You may have noticed by now that all three of the items listed above property tax, adjustable-rate mortgage and homeowners insurance impact your monthly mortgage payment. Use this table as an aid in getting the information you need to avoid Home Owners sticker shock. 

ITEM	Current	Next Year
Property Tax
Adjustable-Rate Mortgage
Property Tax
Total

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