Home Buying in New York>Question Details

Daism, Home Buyer in New York, NY

I landed a 130k annual salary job and parents backing me on down payment. How much can I afford for an UES apartment?

Asked by Daism, New York, NY Sun Dec 11, 2011

Hi, I recently finished school and landed a stable job with 130k annual salary. I want to buy a place instead of renting and my parents are helping me with the down payment. We have enough cash upfront as a family and want to invest something here in UES. Would I be able to afford a $500,000 place in terms of mortgage and maintenance fee...etc?

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15
Hi Daism,

First consult with a mortgage broker or banker to determine how much of a mortgage you qualify for. Calculate the estimated mortgage payment plus monthly maintenance (coop), common charges and real estate taxes (condo).

Several formulas exist to help determine how much a lender will allow a consumer to borrow. One of the more accurate formulas is a front- and back-end ratio. It states that the buyer can afford as much as 28 percent of his or her gross-monthly income toward the monthly mortgage payment, assuming that the consumer's other debt payments (credit cards, car loans, student loans, etc...) are less than or equal to 8 percent of his or her gross-monthly income. A coop will usually want your total housing costs to not be more than 25% of your monthly income. (income to debt ratio)

Understanding your financing needs before you search for a new home will help you move ahead quickly and confidently when you find the right apartment.

Currently we are at record low interest rates. The same amount of monthly payment now buys almost TWICE the dollar amount of mortgage than it did just 5 years ago. (ie $1000 a month now gets you a loan of $220,000 where as in 2006 it would get you a loan of about $150,000).

Rental vacancy rates are now below 1% and the average rent in Manhattan just hit an all-time high up 13% from 2008. Its hard to find a rental apartment now and your monthly cost has risen significant. This makes buying more appealing and we are seeing a big pick up in studios and 1 bedrooms where buyers were initially looking to rent but have figured out that buying is much less expensive.

I’m very happy to talk with you about the Real Estate process and can discuss the opportunities on the UES.

Here is a blog I wrote titled: How much apartment can you afford?
http://www.trulia.com/blog/mitchell_hall/2010/03/how_much_ap…


Best,

Mitchell Hall, Associate Broker
The Corcoran Group
917-312-0924
mhall@corcoran.com
Web Reference: http://nycblogestate.com
1 vote Thank Flag Link Sun Dec 11, 2011
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
In order to use your new Salary to qualify for a Mortgage you are more likely than not going to have to show that you were in the same line of work for 2 Years.
0 votes Thank Flag Link Mon Dec 26, 2011
You need to get pre-approved from a loan officer. Make sure you get approved not pre-qualified because pre-qualified is worthless when making an offer. One of the most recognized financing companies is Manhattan mortgage you should check them out.
0 votes Thank Flag Link Fri Dec 16, 2011
Daism,
A lot will depend on your credit report. Most coops require at least a 720 FICO. Also you have to include your debt into the figures of what you can spend. You need to speak to a mortgage officer to go over the figures before you find a realtor.
0 votes Thank Flag Link Tue Dec 13, 2011
Based on your income you will be able to afford a half a million Dollar apartment. However, most lenders will not lend to you unless you've been working at least a year, some maybe six months. So you best bet would be to speak to a lender and just confirm what their requirements are as far as employment history. if you'd like i'd be more than happy to give you a professional that works with a lot of of first-time homebuyers in Manhattan.

Regards,
Marco Gomez
NYS Associate Broker
Keller Williams Landmark II
marco.gomez@gmail.com
Serving Queens, Nassau and Brooklyn
0 votes Thank Flag Link Tue Dec 13, 2011
Thank God for the family. You don't mention if you have any money going into the kitty here. Your salary while nice is new. I do hope the job is stable. Boards do look for time on the job as well as salary. So, your downpayment is at least $100K (20% of $500K). Keep in mind your closing costs and post closing liquidity. It can be done. Good luck.
0 votes Thank Flag Link Mon Dec 12, 2011
The best thing for you to do is to talk to a reputable mortgage planner and they will be able to give you the best advise based on all the other personal information you need to give them. There are several other factors involved to determine the best mortgage, terms etc.

Best Regards,
0 votes Thank Flag Link Mon Dec 12, 2011
Thank you everyone for your reply. We will check in with a banker to assess our financial situation. My parents will be co-signing the lease with me so we have more financial room to play when we do sign. Thanks!
0 votes Thank Flag Link Mon Dec 12, 2011
This question is really for any licensed loan officer, therefore consider a consultation as he/she can best advise based on your overall financial information.
0 votes Thank Flag Link Mon Dec 12, 2011
Hi Daism, in general you will need at least a 20% down payment and most co-op buildings will require that your total monthly payments (mortgage plus maintenance) total no more than 25% of your gross earnings. Under the $500,000 purchase scenerio, this means that your family will need to provide $100,000 as the downpayment and the payment on the remaining $400,000 mortgage plus the maintenance will need to stay below $2,700 (in other words, your monthly salary times 25%). This is generally do-able and I would say you should definitely use $500,000 as your range for looking at places. Other factors to consider are: will the building you're looking at consider purchasers who are getting family help (most do, not all), and can you get a loan rate low enough to get your payment plus maintenance to conform to the 25% rule of thumb. Some buildings are looser than others and will consider "debt to income" ratios somewhat above the 25% mark so dont forget to ask your broker if you can afford a higher priced property in certain buildings.

Condos are also an option and the debt to income ratio wont matter so much to the building - it's up to your bank how much they'll lend. THe issue with condos is higher closing costs which on a $500K purchase with a $400K loan can be over $10,000.

Please call me at 917-376-1648 of you would like to discuss more of the specifics
Best,
Charlie Summers, Bellmarc Realty csummers@bellmarc.com
0 votes Thank Flag Link Sun Dec 11, 2011
Daism,

Your loan amount will depend on many factors. It is best to seek out a lender and become pre-approved. JPM Chase gives you 1% cash back if you have a checking account with them and obtain a mortgage through them. That is huge as after you spend all your money on your first place you can get a little cash back for decorating! I work with a mortgage lender there that will happily assist you.

You will want to work with a broker to better understand how the market in New York works as it is different from any other in the world. There are many differences between buying a Condo and buying a Co-op. (You were provided with some great links to help build a solid understanding).

When you are ready please feel free to give me a call and we can get started with the steps you will need to take in order to buy your first home.

Best,
Annette Holmgren

Bond New York
aholmgren@bondnewyork.com
212-584-4220 o
401-837-9445 c
0 votes Thank Flag Link Sun Dec 11, 2011
The first thing you will want to do is to speak to a mortgage banker who can assess your debt to income ratio and how much down payment you will be getting from your parents. Typically this is a minimum of 20% down especially during these hard lending times. They will also be able to pull a tri-merge credit report on you which will determine which tier financing you will be qualified to get.

Here is some information that will help save you some money in purchasing a Manhattan apartment and get the best interest rate.

http://www.buyandsellmanhattan.com/how-to-manhattan-apts/how…

Once they have helped formulate what the maximum amount is what you can afford, you will want to see if you fall into the condo or co-op type of ownership.

You can read more about the difference between a co-op and condo ownership here.
http://www.buyandsellmanhattan.com/nyc-condos/

You now have the opportunity to search approximately 20,000 exclusive listings, representing the entire database of residential listings available through the membership of the Real Estate Board of New York (REBNY).

These are the most accurate listings you can find in NY because they come from the brokers themselves; there is no bait and switch, no duplicates, and no opens; and are updated every hour.

When you are ready to purchase, my contact information is listed below or you can find it on my website.

Jennifer Chiongbian
SVP/ Associate Broker
Rutenberg Realty NYC
9172502284
0 votes Thank Flag Link Sun Dec 11, 2011
Daism,
The first step in the buying process is to get pre-qualified by a lender. This serves two purposes. One is exactly what you are asking, which is how much you can afford. By knowing what a bank, under their current guidelines (which keep changing) is willing to lend you, you will know what you can afford. The other reason this is so important is that when you and your agent (we'll get back to that part) are ready to put in an offer on a property, the agent for the seller will want to see your prequalification letter before they will take your offer seriously. They need to know you have the means to complete the transaction before they will allow their seller to take it off the market for you.
Equally important is to make sure you use a skilled, experienced buyer's agent. We can streamline your search, negotiate on your behalf, and take you through all the steps to closing. Sellers have an agent, and so should you. It levels the playing field.

Best,
Jenet Levy
Halstead Property, LLC
jlevy@halstead.com
212 381-4268
http://jenetlevy.halstead.com for all NYC listings
0 votes Thank Flag Link Sun Dec 11, 2011
My Partner, LEISA ARAS, specializes in purchases of this kind on the upper East Side. We have a number of clients with similar financial concerns and I would recommend that you contact her directly. She can walk you through the details with ease.

With $500K as your intended purchase price budget, you can most assuredly afford a lovely one bedroom unit. Inventory is good on the Upper east, and the best deals are to be found there.

Please contact LEISA ARAS at laras@lgfairmont.com. Or if you prefer, please send me your contact information and we will contact you instead.

All best,

Robin Raines
Vice President
LG Fairmont Group
0 votes Thank Flag Link Sun Dec 11, 2011
Hi Daism, call me at 917-584-9969 yes you can buy a beautiful apartment in upper east side.
0 votes Thank Flag Link Sun Dec 11, 2011
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