Expenses and income taxes in the city are substantial, especially if you have kids to bring up. So it seems to me you need to make significantly more than $250k to afford a million dollar apt in the city, or have a decent amount of cash on hand OR have a very, very secure income stream that is expected to rise as the years go by.
If you have a SO, and combine $250k, then you can afford a $600k house. Otherwise, you will find yourself like most other people work from January to April just for the bank. Do the math yourself and see what the amortization schedule looks like on a 30 year loan, not to mention that you will be paying a lot of property tax to subsidize other people’s kids when you have none.
To compile these results, HSH.com calculates the annual before-tax income required to cover the mortgage’s principal, interest, property tax and homeowner’s insurance payment. We use standard 28 percent "front-end" debt ratios and a 20 percent down payment subtracted from the median-home-price data to arrive at our figures.
. your household gross income, and total debt (including housing costs) under 36. Another guideline for determining how much house you can afford – one.
This means that if your monthly gross income is $4,000, your monthly principal, interest, taxes, and insurance payment, called PITI, can’t exceed 31 percent of $4,000, or $1,240. It comes out to $1,120 PITI for a conventional loan.
· With income at 48,000 per year, you will need a large down payment to qualify for a mortgage on a $300,000 house. There are several options that might assist you such as up to 40 year mortgages, if your state will take the 00 tax credit (or the percentage you can qualify for) and apply that as down payment, and having a good credit rating to get the lowest interest rates to name just a few.
· The Basic Formula. Some experts suggest that you can afford a mortgage payment as high as 28% of your gross income. If true, a couple who earn a combined annual salary of $100,000 can afford a monthly payment of about $2,300/month. That could translate to a $450,000 loan, assuming a 4.5% 30-year fixed rate.
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