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I graduated college last May and have had a full-time job in NYC since then. I make $60,000/year ($3500 a month after taxes) and have no expenses since I live with my parents in New Jersey. My plan was to move out last year and rent but because of COVID I’ve been able to work from home. Because I’ve saved up all my earnings, buying has become a consideration. I’ve saved $30,000 in the last 8 months and I will be working from home and saving till at least the end of the year.
I’m only looking in Queens (QB line-anywhere between Woodside and Kew Gardens, with Forest Hills as my preference) because I have family there and am already familiar with the area. My commute would be 30-40 minutes on the E train. Don’t want to live in Manhattan and most of Brooklyn would be a longer commute. My preference is a studio or 1 bedroom, in one of those 1940s/1950s brick apartment buildings that are common in Forest Hills. I’ve looked on StreetEasy and have seen apartments from ~$260,000 cheapest. I grew up in a family of 5 in a 1000 sq ft apartment so I’m not picky about space at all. Been building credit since 16 and my score is in the high 700s. I paid off my full student loan of $10,000 in one payment in the fall.
Given my situation, is there a possibility for me to be given a mortgage assuming I can put 20% down? How much of my salary should ideally go towards a mortgage? I don’t want to waste money on renting if I can avoid it.
Yes, you should be able to qualify for a mortgage once you gather the 20% down (10% down should suffice in getting a conventional loan in some cases) as long as your monthly debt to income ratio is below the 40-45% range. The ratio is the combination of your monthly debt service (car loan, mortgage/hoa/prop taxes, student loans, etc if applicable) divided by your monthly gross income. I'm not a loan officer but those were the parameters I was told when I bought my home last year.
Interest rates are super low now so considering your credit score and no student loans, you should be able to qualify for something well above the $260,000 apartment you mentioned above. I'm from california so I'm not sure how many additional fees an apartment in your area will assess (property tax rate, homeowner association dues) but those will be factored into the debt to income ratio.
Ideally a mortgage should be under 1/3 of your salary assuming low debts in other areas (car). But also keep in mind that your salary may be 60k now but it'll almost certainly be much higher than that in 5 years.
I said if he gets "jammed up" that the $60K won't go too far! Maybe homeboy knocks up a girl or something. Maybe homeboy get a medical issue that won't be covered by insurance. I had $7K one year in payments for MRI's - and I had "good" insurance via my fortune 500 corp at the time. Maybe homeboy gets a DWI and has to spend $$$ hiring a lawyer and loses his car and has to buy a new one. Things happen.
Yeah... IF... That's why he should have a good nest egg, but don't beat up on the guy because he's young. I hate that ****. There are plenty of smart, money-savvy young people who know how to save and make their money work. Plenty of New Yorkers make it work with half of his salary, even if they have roommates. He doesn't have to go that route if he has a good down payment. He can live alone, and live a good life with that salary. The biggest expense in NYC is your rent/mortgage and then food. You don't have to have a car in most areas to get around, and Forest Hills has plenty of transit options. LIRR, express bus, subway. All would be cheaper than having a car, that's for sure.
Quote:
Originally Posted by Trisky
Are you sure about that? I make 70k and net $3500 (with about $100 to my 401k every month). This is after taxes and insurance.
Luckily I'm in the same apartment for 21 years at $1300 and about $1200 in expenses so I'm able to save $1,000 a month.
I gave a rough estimate. Let's say it's $3,000 - 3,500 a month. It depends on 401k/IRA contributions and any other withholdings, but at the lowest, $3,000 a month. He'll still be ahead, as he'll be paying down his mortgage, and the bigger the down payment, the smaller his monthly payments will be. Actually, the OP brings home $3,500 a month after taxes, so I'm only $300 off. Not a big deal since it was an estimate.
Quote:
Originally Posted by 90sSitcom
No excuse for that.
Well you may think that, but I know of some people who have crippling student loan debt. Luckily for me, most of mine is paid off. I graduated with about $30,000 in student loan debt, a lot of it was from the private school I went to in Italy, but I paid off about $10,000 of it. I paid off two of the four loans, the ones with the highest interest rate. I consolidated the other two to something like 2% interest or some crazy number years ago, and that is what I have left to pay. I know people who have to close to three times that or more, with $100,000 in student loans. You have to think about how quickly tuition costs have skyrocketed. I mean one semester was about $20,000+ for me. Today that would likely be $30,000+. Huge difference.
Well you may think that, but I know of some people who have crippling student loan debt. Luckily for me, most of mine is paid off. I graduated with about $30,000 in student loan debt, a lot of it was from the private school I went to in Italy, but I paid off about $10,000 of it. I paid off two of the four loans, the ones with the highest interest rate. I consolidated the other two to something like 2% interest or some crazy number years ago, and that is what I have left to pay. I know people who have to close to three times that or more, with $100,000 in student loans. You have to think about how quickly tuition costs have skyrocketed. I mean one semester was about $20,000+ for me. Today that would likely be $30,000+. Huge difference.
I think people should stop spending so much money they don't have. If your 30 and still have to mooch off other people then yah you need to get yourself together.
I said if he gets "jammed up" that the $60K won't go too far! Maybe homeboy knocks up a girl or something. Maybe homeboy get a medical issue that won't be covered by insurance. I had $7K one year in payments for MRI's - and I had "good" insurance via my fortune 500 corp at the time. Maybe homeboy gets a DWI and has to spend $$$ hiring a lawyer and loses his car and has to buy a new one. Things happen.
These things can happen at anytime and at any point in your life. Is the solution live with your parents forever?
Nobody is telling him to deplete his savings, if he has a decent savings account he will be prepared for those things. Also, I'm going to assume the OP is a responsible adult given everything he's said, "knocking a girl up" and "DWI's" tend to not be common among responsible adults.
I think people should stop spending so much money they don't have. If your 30 and still have to mooch off other people then yah you need to get yourself together.
It's not even about that. The job market here, even during great times, is not creating jobs where most young people can live on their own. My generation (millennials) and Gen-Y are two of the most debt burdened generations now, mainly from student loan debt. I know of someone who recently finished grad school to become a lawyer. They live at home (they are in their mid 20s) and are saving aggressively to be able to afford to buy something, but they also have at least $100,000 of student loan debt. Most young people do not start out with high salaries right away now, so the options are stay at home or have several roommates. That's why I find it funny that people like elnrgby has the nerve to pass judgment on people that rent.
The people renting at market rate are doing just fine, as it is expensive to live alone in the City.
It's not even about that. The job market here, even during great times, is not creating jobs where most young people can live on their own. My generation (millennials) and Gen-Y are two of the most debt burdened generations now, mainly from student loan debt. I know of someone who recently finished grad school to become a lawyer. They live at home (they are in their mid 20s) and are saving aggressively to be able to afford to buy something, but they also have at least $100,000 of student loan debt. Most young people do not start out with high salaries right away now, so the options are stay at home or have several roommates. That's why I find it funny that people like elnrgby has the nerve to pass judgment on people that rent.
The people renting at market rate are doing just fine, as it is expensive to live alone in the City.
We have excellent local colleges that don’t involve running up lots of debt ...all our kids went to queens college .
The fact huge debt was run up that both the parents and kids couldn’t afford , by going to out of town schools is no ones fault but their own.
My son even stayed local for law school at Hofstra ....
He got picked up out of school by one of the biggest labor law firms in the country ...he is one of their youngest full equity partners today
His wife who he met in queens college , graduated queens college , became a cpa and runs the tax dept for a very famous hedge fund earning multiple 6 figures.
There is nothing wrong with going to local schools
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