The Impact of Rising Property Tax & Insurance Costs on Mortgage Affordability

 

In 2025, rising home insurance premiums and property taxes are reshaping the very idea of mortgage affordability. And if you’re in the market for a Non-QM loan, those shifts matter even more. You might not qualify for traditional financing because you’re self-employed, a real estate investor, or working with unique income documentation. But even if a Non-QM loan gives you the flexibility that conventional loans don’t, you’re still navigating the same financial challenges from a different angle.

In this blog, we’ll explore how increasing costs affect your monthly mortgage outlook and what you can do about it.

The Hidden Side of “Affordability”

When most people talk about mortgage affordability, they think about the interest rate and the monthly principal payment. But your lender and wallet are looking at the complete picture, including:

  • Property taxes
  • Homeowners insurance
  • HOA fees (if applicable)
  • And sometimes even escrow reserves

Why This Matters for Non-QM Loans

Non-QM loans are already about creative structuring. You often work with bank statements, asset-based income, or unique property types. However, Non-QM lenders look closely at debt-to-income ratios and reserves, especially when taxes and insurance start inflating monthly costs.

If you’re buying in an area with high or rising taxes and insurance premiums, your DTI could exceed the acceptable range, even if your income is solid.

What We’re Seeing in 2025

  • Insurance premiums are up due to climate volatility, inflation in construction costs, and higher claims volume across the U.S.
  • Tax assessments are catching up to pandemic-era property appreciation, which means many homeowners are getting hit with reassessments they weren’t prepared for.
  • Escrow shortfalls are common, even among seasoned investors, and many lenders are tightening their risk calculations in response.

Non-QM borrowers may need to contribute more or get creative in structuring their income documentation to show strength.

What You Can Do About It

Here’s how to stay ahead of these affordability pressures:

  • Budget beyond the mortgage: Don’t just look at principal and interest. Factor in worst-case scenarios for taxes and insurance, and ask your lender for a realistic monthly estimate.
  • Shop insurance early: Rates vary dramatically between carriers, and bundling or increasing your deductible may help keep costs manageable.
  • Explore interest-only or bank statement options: Many Non-QM mortgage loans offer flexible payment structures that can ease short-term pressure and help with cash flow.
  • Work with a lender who understands nuance: At HomeSpring Mortgage, we examine your whole financial picture and help you manage increasing costs with smarter loan options.

Reach Out to HomeSpring Mortgage to Learn More About Non-QM Loans in Charleston, South Carolina

Home prices may hold steady in 2025, but rising property taxes and insurance premiums are the silent weight increasing your monthly payment. For Non-QM borrowers, you’ve already shown that your story doesn’t fit the traditional mold. The key now is having a mortgage company that can help you tell that story in a way that works in today’s market.

At HomeSpring Mortgage, we help borrowers structure smarter Non-qualified mortgages that reflect their real-world income and rising expenses. From bank statement loans to interest-only, asset-based, and foreign national loans, we specialize in finding creative solutions that meet you where you are. Contact us today to get started. Call us at 8006214656.

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