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When we were looking in Chatham borough, we were amazed how little you got for your money. Small, outdated 3 bedrooms 2 bath houses with no land and a one car detached garage for $800,000. We just couldn't justify it!
We were living in a very nice town home in Livingston and wanted a single family home. We ended up in Florham Park where we got an a amazing house on a cul de sac for under a million. The big plus is that we not have to deal with Main Street traffic which is the worse!
With a salary of $137k, the purchase of a $665k home is perfectly affordable. Assuming 20% down payment, that leaves a $532k mortgage. With today's low rates, that's roughly $2500 per month mortgage payment, figure another $800 per month for property taxes, and you're looking at a total monthly payment of $3300. $137k salary equates to $11416 monthly, and spending $3300/$11416 = 29% on your home which is well within almost all affordability guidelines.
Anyone with that income buying a house that price with that mortgage is crazy.
The median household income on city data for Chatham NJ was 137,496 and median home price was $665,216 in 2009 (not sure what it is today- does anyone have updated numbers ?)
So how are these people with median incomes of 137k able to afford a 665k home ? I understand that it can be done monthly payment wise with sensible budgeting, but the question is more about what the bank will approve for a loan ?
I understand that Madison, chatham etc., are rich towns with rich people in there. When we say "rich" are we talking about the ppl making a median family income of 137 k ?
I had not considered that regardless of my attitude towards wealth or lack thereof, the kid would be exposed to these things- and someone here opened my eyes to it . now I am worried.
I really want to live in one of these areas for the good schools and maybe someday buy. But I am very worried about the kid (4 year old) a) feeling deprived on some level, by comparison. One can try to instill a sense of self-worth that comes from within, yet I don't want to have to fight an uphill battle....
so how rich is rich.. in these parts ? would earning a bit below the median make me and my kid "poor" ?
I'm going to have to move soon, starting to pack- yet don't have a location identified. help!
I would say they can be approved, of course assuming they have good credit. The mortgage payment should not be more than 28% of the gross monthly income. So a 20% down payment on a $665,000 house would be $133,000, the remaining balance would be $532,000. Based on 5% interest (current rate is even lower than that) and a 30-year term, the mortgage payment would be $2,856. The annual income as per your example is $137,000. So the monthly income would be $11,417. Based on this, the monthly mortgage is about 25% of the monthly income. So yes, they will be approved.
Housing shouldn't exceed 33% of your net income.(monthly payment)
Yeah, and your commute shouldn't take more than 15 minutes. Welcome to northern New Jersey; everything costs more, housing costs more than that, and property taxes are even more, so unless you're filthy rich or are willing to settle for a relatively lousy place, you're going to be paying more than you'd like.
Yeah, and your commute shouldn't take more than 15 minutes. Welcome to northern New Jersey; everything costs more, housing costs more than that, and property taxes are even more, so unless you're filthy rich or are willing to settle for a relatively lousy place, you're going to be paying more than you'd like.
I cant tell if you are welcoming me or trying to scare me off
I am moving to be close to the family ... we all have to make our compromises. I think I can forego a BIG fancy house, and don't need the good nyc commute, but would like to not compromise on the neighborhood and schools.
I cant tell if you are welcoming me or trying to scare me off
Neither, I'm just pointing out some realities that Dave in Tennessee doesn't seem to be aware of. The cost of living index for this area is 130; that means it's 30% more expensive to live here than the average place in the country. However, the cost of housing part of that index is 169 -- meaning housing costs 69% more than in the average place in the country. That means that you will likely be paying a greater percentage of your income towards housing than you would in some other area of the country. It's just the cost of living here.
Quote:
I am moving to be close to the family ... we all have to make our compromises. I think I can forego a BIG fancy house, and don't need the good nyc commute, but would like to not compromise on the neighborhood and schools.
Well, part of the cost of Chatham is probably due to the good commute; the nearby towns of Florham Park and Livingston are somewhat less expensive and still have good schools.
Neither, I'm just pointing out some realities that Dave in Tennessee doesn't seem to be aware of. The cost of living index for this area is 130; that means it's 30% more expensive to live here than the average place in the country. However, the cost of housing part of that index is 169 -- meaning housing costs 69% more than in the average place in the country. That means that you will likely be paying a greater percentage of your income towards housing than you would in some other area of the country. It's just the cost of living here.
Well, part of the cost of Chatham is probably due to the good commute; the nearby towns of Florham Park and Livingston are somewhat less expensive and still have good schools.
Thanks for that info. Where did you get the breakdown of the index ? I looked but the numbers I'm finding are different than what you have posted. I live in an area now, which has somewhat of a higher housing price than the rest of the country. We've been able to afford a home in the mid 400s on the income of 90k about 7 years ago, without much of a problem. So I am a little sceptical about tahiti's numbers. Seems a little too conservative. Not sure why she has come to that conclusion- would be good to know.
As for cost of living- a slice of pizza here is 3.99 +, my grocery bills are astronomical. Is there a way to know if your index can be broken down into groceries too ?
Thanks for that info. Where did you get the breakdown of the index ? I looked but the numbers I'm finding are different than what you have posted. I live in an area now, which has somewhat of a higher housing price than the rest of the country. We've been able to afford a home in the mid 400s on the income of 90k about 7 years ago, without much of a problem. So I am a little sceptical about tahiti's numbers. Seems a little too conservative. Not sure why she has come to that conclusion- would be good to know.
As for cost of living- a slice of pizza here is 3.99 +, my grocery bills are astronomical. Is there a way to know if your index can be broken down into groceries too ?
As far as the cost of food, a slice of cheese pizza in the Chatham area is around $2 to $3, in my experience, though as I have a family, we typically get whole pies. As far as groceries, there are four "local" grocery stores:
You can easily get an idea on pricing by looking at their weekly circulars.
Another thing you should consider when looking at budgeting is the cost of childcare and auto insurance, both of which are pretty high here in NJ.
HTH
KoalaNJ
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