Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
@kayfouroh - You guys did steer someone away, but I see a big difference between both situations. I have an extra $12k salary per year, finished going to school, and not paying for a commute ticket to NYC, and have ability to use a VA loan.
Also (not looking to get into potential relationship breakups) I will also be aided in mortgage payments by my gf. We have been renting together past 6 years and split that cost.
If you are looking to steer me away, please give me an example of an ideal (not perfect) situation of where you think I should be before investing as a homeowner in long island? To be more specific, if targeting a range of $300 - $400k I should be making $XX dollars per year, with $XX in the bank, etc etc. That way I can see where I stand and measure where I am headed.
What you have going for you is a hefty amount of savings. I wish we had 20% to put down, but because we don't, we have to pay PMI until we re-finance out.
However, you will have a hard time finding a 3bd/1ba house in Nassau for less then 300k (we've looked in that range ourselves). In Suffolk, there are some, but they are much deeper into Suffolk (Ronkonkoma, Lake Ronkonkoma, Holbrook etc).
Budgeting is key when it comes to house hunting. Every little bit of it.
assuming we give up debating what salary is enough to buy a home on LI, it might be better to just talk basic strategy.
People will tell you that you MUST put down 20% on a home. I say it's WAY more important that you have a PAYMENT that is affordable and sustainable, and have liquid savings in the bank. People warn that if you don't put enough down, you may end up "upside down" on the mortgage (owing more than your house is worth) and having to bring cash to the table if you sell it.
What they seem to forget is, that cash is the same cash you would have put down to begin with, so there is no difference. On the flipside, if you lose your job etc, you can't count on the "equity" in your home to bail you out. Your savings might save your house.
So, like I said, focus on your PAYMENT when determining your buying power.
For example, a 250K loan at 4% is about 1200 bucks a month for principle and interest.
Add: your property tax (600-800?)
Your Homeowners insurance (125-150)
Mortgage Insurance (if you don't put down 20%) 150
So, without considering electric, heat, food, car, etc you're at 2100 on the lower end to grab a 250K mortgage.
NOW take 62K and divide it by 12. Your monthly gross income is just under 5,200. So, a 2100 housing payment would represent around 40% of your gross income. That's considered VERY high and would be tough to push pass an underwriter (even if you could, it's not a great idea). 30% is about the limit - which puts you around 1500 bucks or so.
@superfly - I guess I will know the firm number once I get an approval from an underwriter but if it is to low and I need to change my strategy then I would need to either ...
A) I need to lower my horizons to a town home that's in the $250k - $300 range
B) Save another year for an extra $25k or so...
or....
C) I need to put my G/F on the loan with me and continue with original plan!!
Dont buy a home with someone you arent married to.
This is silly - you can buy a home with someone you're not married to (ask any gay couple who couldn't marry until recently in New York), you just need to do a lot more legal paperwork, and should consult with a good real estate lawyer to make sure you've planned for all contingencies (i.e. What happens if you break up? If one of you passes away suddenly? If you both pass away suddenly?) and have an agreement in place that covers it all. The legal bills will be higher than they would be if you were married (since being married creates default rules to be followed in situations of break up or death), but it's doable if you are committed to buying a home together without marrying.
As for whether you can afford a house, superfly gave you the formula - if your mortgage + taxes + insurance + pmi (if you need it) is more than 30% of your income, you likely won't get approved by the bank. $90K down should be fine on a $350-400K house (since it's more than 20%), but your debt-to-income ratio needs to be in line as well.
Dont buy a home with someone you arent married to.
I agree. Those that do, are at risk for having zero protections if the relationship goes south and they have nothing to show for the efforts they made in paying for or maintaining the home. I don't understand how OP is dating a woman for 6 years and is not married by now. Why the hold up? A city hall wedding is only $20 or so. If she wants a big wedding, why not just get married and then plan a big reception when funds become avail? or just have a 2-3 year long engagement?Not to dwell on the relationship aspects, OP can afford a home at $62K but its going to be super tight to qualify for a mortgage in the $300-350K range...the formula above is right on target...what about condos or co-ops?
FWIW, I was earning $62K when I first bought my condo in 2006. However it was a 1 bedroom in Queens and it cost me on the low end of $200K-225K. Even with 5% down, I really struggled to make my $1800/mo housing payment (mortgage and HOA) because of all the unexpected costs of ownership I did not prepare for (cable, new furniture, utilities, a/c broke down, etc). You and your GF may become fixated on that $2100/mo payment and think, "oh we can totally swing that!" But not realize there is more to it..you will spend more for heating, air conditioning, cable boxes in all the bedrooms, etc, etc, etc..before you know it, that $2100/mo is really $2800/mo plus all your other expenses like food/groceries, gas, etc.
Last edited by LegalDiva; 08-01-2013 at 07:32 PM..
This is silly - you can buy a home with someone you're not married to (ask any gay couple who couldn't marry until recently in New York), you just need to do a lot more legal paperwork, and should consult with a good real estate lawyer to make sure you've planned for all contingencies (i.e. What happens if you break up? If one of you passes away suddenly? If you both pass away suddenly?) and have an agreement in place that covers it all. The legal bills will be higher than they would be if you were married (since being married creates default rules to be followed in situations of break up or death), but it's doable if you are committed to buying a home together without marrying.
As for whether you can afford a house, superfly gave you the formula - if your mortgage + taxes + insurance + pmi (if you need it) is more than 30% of your income, you likely won't get approved by the bank. $90K down should be fine on a $350-400K house (since it's more than 20%), but your debt-to-income ratio needs to be in line as well.
Sure you can buy a home witj anyone you want- that doesnt make it a good idea.
Marriage you can get a pre-nup. With a relationship there are no protections, and it would be extremely messy to own a house if the relationship went sour. OP can do whatever he wants but buying a house with a GF is a horrible idea.
if you are in the military and you are a first time home buyer i hear you can get a home for $1 down and yo finance the rest. use the 90k as your cushion?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
