How Much Will Your Mortgage Be in Iowa?
With its rolling plains and beautiful cornfields, Iowa, the Hawkeye State, is a perfect place to call home. This Midwestern state boasts an affordable housing market with a population of just over three million. It is the 30th most populous state in the U.S. As well as being more affordable than other states, Iowa is regarded as one of the safest states to live in.
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Factors That Can Affect Your Iowa Mortgage Calculations
Price of Housing
The price of homes in Iowa can vary depending on the geography and the general desirability of the housing market. As they say, it's all about location, location, location. So it's always best to identify the specific cities in Iowa you want to purchase a home in to get a better sense of average home prices in your preferred area of Iowa.
Property Taxes in Iowa
The state of Iowa has a higher property tax rate than the national average of 1.08%. Iowa’s statewide average effective property tax rate is 1.53%. It is the 14th highest rate in the country. However, rates will vary significantly between counties and cities.
Iowa Job Stats to Consider
Iowa is often regarded as a farming state, but the state’s economy is quite diverse. Residents can pursue careers in many sectors such as manufacturing, biotechnology, finance and insurance services, medical, and government services. According to CNBC’s “Top States for Business in 2010,” Iowa is regarded as the sixth best state in the nation, especially for the cost in doing business.
Despite not being one of the most populous states in the US, Iowa is a wealthy state. The median household income according to the 2018 Census was $58,580. Within Iowa, 4.2% of households are regarded as high-income households that make over $200,000 a year. In January 2020, the Bureau of Labor Statistics recorded the rate at 2.8%, far less than that national average of 3.7%.
Iowa’s income taxes range from 0.33% to 8.53% over nine brackets. The tax brackets remain the same regardless of marital or filing status. The statewide sales tax is 6% with some cities and municipalities allowed to collect a rate of up to 1% in city sales tax.
Job Stats (Civilian Labor Force, Employment, Unemployment)
Other Iowa Costs That Can Affect Iowa Mortgage Calculations
Homeowners Insurance in Iowa
The median cost of homeowner’s insurance in Iowa is higher than the national average. Homeowners spend on average $1,421 annually on insuring their homes. Iowa is prone to tornadoes, frequent thunderstorms, and hailstorms. While most homeowner’s insurance policies will cover theft, fire, winds, and storms, they do not necessarily cover the cost to rebuild your home if it has been completely destroyed by a tornado or storm. Be sure to take appropriate measures to protect your home from Iowa’s extreme weather conditions and check your policy for what is covered.
Iowa’s closing costs range from 0.96% to 1.91% of the final home sale price. Most homes in the state sell between $100,000 and $200,000, so buyers can estimate their costs to fall between $956.50 and $3,826 after taxes for homes purchased in this range.
Title insurance protects the owner and mortgage lender against any future unforeseeable claims that might come about regarding the property’s title. These claims may be overlooked at the time of purchase and surface in the future. Your lender will usually require a policy that equals the amount of the loan. The nationwide average cost for title insurance is $1,000 and is a one-time purchase.
Real Estate Transfer Tax
The real estate transfer tax rate varies from county to county in Iowa. However, the statewide real estate transfer tax is calculated at $1.60 per $1,000 where the first $500 is exempt.
Before final sale of your home, it is important to schedule a home inspection to ensure the ensure the property is structurally sound. The average cost of a home inspection in Iowa is $340, dependent on area and square footage of the home.
Inspectors will assess the foundation, roofs, basements, plumbing, electrical aspects, grounds, fireplaces, heating, and cooling systems of a home to determine its safety. At an additional cost, other tests including termites, pests, mold, and radon can be carried out.