How To Buy a Brownstone?
I am a first time buyer…I have over 750 credit…can I qualify to buy a home over $850,000 with less than $150,000 income? How do you buy a home based on potential rental income?
I am a first time buyer…I have over 750 credit…can I qualify to buy a home over $850,000 with less than $150,000 income? How do you buy a home based on potential rental income?
Be patient and wait a few more months prices are just starting to come down in Brooklyn and the have a long way to go. You don’t want to buy a condo because you are going to buy the maintance guy too! Why pay maintance costs that are more than your month morgatge costs?
“I remember in the early nineties my co-workers who made about 130K were buying houses and co-ops in the 90-200K range.”
That sounds exactly right. Has something changed?
With all due respect some of the commentors are way off on their mortgage material. WAY OFF
45% is the max dti for Agency Jumbo loans and Freddie Mac loans. Fannie Mae still will allow above 45% depending on LTV, credit, reserves, etc..
You can count 75% of the other unit’s gross rental towards your income.
That said you need to be comfortable with the payments regardless of what any bank will lend to you. I would also recommend having some cash reserves if you have a bad tenant that stiffs you on the rent.
There are thousands of mortgage calculators on the web.
earning 103K and buying at 200K. What a dream.
I’m certainly not accusing you of crazy-talk, Heather.
I bought for specific reasons. Our income expands and contracts a lot. We knew that we could afford the short-term push to renovate because the short-term situation was good, but that in a contraction it would be really good, financially, to have rental income, or even to be able to rent out our duplex if things *really* contract.
Over the long term, our house is going to help us take more risks and do more interesting things. But there’s no such thing as a free lunch.
Yes, exactly, ditto. Quality of life vs. home ownership… when I can get a monthly payment closer to my rent we might buy. But paying almost twice as much, plus maintenance costs… I just don’t see the point.
That being said, I’d love to buy. I just don’t want to sacrifice everything to do it. I’m not so sure that’s crazy-talk either. I remember in the early nineties my co-workers who made about 130K were buying houses and co-ops in the 90-200K range. Yes, real estate was a different thing then and interest rates were higher, but still, if you make a nice income, isn’t it good to actually HAVE some of it left after paying your housing costs?
I understand where Heather is coming from. Paying for the house and buying clothes and food and having little left over would not a happy dittoburg make. I need at least one spectacular vacation a year (after all, how many vacations can you fit into four-score years, not many compared to the number of places in the World to go), I need a trip back to the old country, with the family, to see the parents each year, I’m helping out my own family, charitable contributions, weekends away at the beach, skiiing, hiking, northern-lights watching, a little splash on some art, some good eating out (some expensive, some not), shows, a decent barolo or a chateauneuf etc etc. It all adds up. Plus savings for the unknown. 25% income on housing for me.
The bank takes into account how much the apartments rent for, minus two months of rent per year, and subtracts that from your total costs. However, be warned that if the bank is lending you a mortgage that takes into account rental income, the apartments have to be rented at that price when you take possession. But you might be able qualify for the whole thing without taking into account the rental income.
On a 150K salary with zero other recurring debts, a 36% debt to income would be $4500 per month for total housing expenses -the old/new lending standard. A 500K mortgage for 30 years at 6% would be right at 3K, not including taxes and insurance, so theoretically if there was no other debt it could be approved – if you also meet their new reserve holding requirements that most lenders are now requiring. If you have other debts, then the old 28% DTI for mortgage applies which is $3500 not including taxes and insurance, so you’d be pushing it once you ad those in. If your total debt payments with the new mortgage would exceed 36% of your monthly income, then good luck, you’ll need it in today’s lending market. They would float a little higher in a 2 family, but you are saying you don’t want to live with anyone in your house, like an apartment (don’t blame you – why pay $4K a month to live in a closet), so the 36% generally will apply.