Can I afford to buy a house or condo in NY? My husband and I make $110,000 a year. How much can we afford?
August 2, 2008 · Print This Article
PAGRO asked:
Based on my salary, what ranges of prices can we look for?
Keeping in mind we dont want to become slaves of a mortage payment.
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Based on my salary, what ranges of prices can we look for?
Keeping in mind we dont want to become slaves of a mortage payment.
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Josh Dunaway has been a certfied Realtor in the suburban Chicagoland area for over 20 years. Aside from starting his own real estate company, he also owns a mortgage company as well.
yeah, yoru salary should be able to cover a condo.
The general rule is 25% of your salaries should be used for a mortgage payment. Up to 50% if you have fewer bills and want to be a slave. Why N.Y.?
Please go to realtors web site. There is always such a tests to answer your questions.
One of them is on Yahoo Finance:
Anywhere in NY? ’cause there’s some relatively cheap land in the upper section near Canada, but you’ll have to cut your own trees for firewood, and rain buckets for water.
After a year or less, you’ll end up divorced. Hopefully, you’re the one making the $81,000 out of the total amount. Parts of Ohio, you can live on that.
Otherwise, have you thought about joining the Pease Corp?
There are too many unanswered questions, do you have a down payment or are you looking for 100% financing? How much of your monthly income do you consider “being a slave” to?
Based upon just your income statement, at 100% financing on a 80/20 loan, you could most likely afford anything around 450k…but don’t quote me on that, until you call me I can’t give definitive answers.
Rule of Thumb: 110,000 div by 12 = 9166.66 month
Look into prices of homes, and take into consideration of the taxes and home insurance policy.
Estimates only:
Insurance estimate 1600.00 yr 133.33 mo.
Property Taxes estimate 10,000 yr 833.33 mo.
That is 966.66 a month, (f you escrow) this amount will be added on top of your P/I Principle and Interest payment.
Now decide on your payments:
9166.66 - 966.66 (Taxes and Insurance) = 8200,00 left.
50 percent of your income comes to 4,583.00
40 percent of your income comes to 3,666.66
You have to consider your total monthly debit to get to your DTI that lenders look at.
Car payment, lease payment, credit cards, any monthly debit, but do not include utilities, cell phone etc.
I would think you would be confortable with a payment in the 3,666.66 range or below.
3,666.66 - 966.66 (taxes & ins) = 2700.00 for a house payment.
A 400,000 mortage at 7 percent is 2,661.21 (P/I) Than add taxes and Insurance for a total payment of 3,627.87 That leaves you with 5,538.79 for your other monthly bills, etc.
It all depends on your credit score, and the rate you qualify for.
Also:
Talk with a broker, a broker underwrites for many company’s (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a “hard” pull and it drags down your credit score. Try to find someone (broker) that will pull your credit one time, and submit your loan application to company’s that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only - not the final - but it does help you figure things out. Some companies want you to escrow you taxes and insurance. Other’s may not require it…Some companies add a .25 to the interest rate if you want to escrow waver…FHA loans have to escrow (at least they used to)
Decided on the type of program (loan ) you are wanting. A 30 yr fix is still roughly at a 6.5 rate right now - but if you are needing a 100 percent ltv the rate is around 7 to 7.50 percent. This is a estimate only, since I do not know what your credit score’s are….There are also, interest only loans - adjustable loans, option arms (where you pick the payment, from 4 payments, including interest only). Interest only are lower payments, but nothing is being paid on your home. Some self-employed ppl like the payment options, in a lean month when money is tight., they can pay a lesser amount.
Good Luck to you - A Broker, who cares, will go over it all with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process
You can afford as much as your monthly budget allows. Don’t like mortgages… large down payments and a 15 yr mort. may be your options.
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