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Wait, a realtor told you the market is in good shape.....
What? You don't believe a realtor? I had a realtor once tell me that someone already offered $100,000 more than the listing price of the home, but the owner was still showing it. I thought all realtors were honest.
I'd be interested in your real world math for a 450k mortgage on a 150k salary... specifically when you factor in LI taxes, utilities, insurance, etc, etc. Even if that couple had the 90k cash (serious LOL) for a 20% down payment, I'd be concerned floating a 360k mortgage on that salary. Specifically because you need to maintain an emergency savings, you want to save for your kid's education, go on family vacations, etc... I'm talking quality of life where everything isn't based on meeting the housing payment and keeping the lights on every month.
It's doable, and it depends on your definition of QOL. See the math below.
Gross: 150K
Net per month: 7,500 (exclusive of maxing out 401K, health insurance, life insurance through work, taxes - fed,state and local)
Mortgage: 360K for 30 years at current rates 4.75% assuming borrower has sterling credit: 780-850.
Monthly P&I: 1,878
Taxes: 1,000 (if you want to live on north shore, probably cheaper in other locales)
Insurance: 50 - house only
College sav. 1,000
Train 350 (to and from work)
Utilities 400 (heat, light, water)
Vacation (Hawaii - offering packages for 1,500 per person, kids stay home) 375
Car Ins 95 (how's my gecko, friend)
Cable 100 (as much as I hate them, can't beat the triple play)
Cellphone 75 (his and hers, family plan)
Food 300
All other 1,877 (Plenty of buffer for maintenance expenses, savings, etc)
Net: Zero, if you can't manage to save 1,000 per month on a 150K salary, then you really need to read one of those self-help books.
anyone else feel like theres something wrong and were heading for a serious downturn? I think the housing market in LI is going to get destroyed...
Have you been in a cave for the past year? The economy has been in the dumper since January, and despite what the government says with their finagled statistics, is only getting worse. There is a whole new second wave of home foreclosures about to happen in the next few months, when thousands of homebuyers are gonna get hit with balloon payments.
The "real" unemployment is around 20%, which is darn close to that of the Great Depression in the 1930's.
I'd be interested in your real world math for a 450k mortgage on a 150k salary... specifically when you factor in LI taxes, utilities, insurance, etc, etc. Even if that couple had the 90k cash (serious LOL) for a 20% down payment, I'd be concerned floating a 360k mortgage on that salary. Specifically because you need to maintain an emergency savings, you want to save for your kid's education, go on family vacations, etc... I'm talking quality of life where everything isn't based on meeting the housing payment and keeping the lights on every month.
It's not "MY" math buddy, that's the old standard of what is considered affordable. I wouldn't spend that high a percentage of my own income, I'm talking about basing what houses should sell for based on what banks will lend. Go yell at the mortgage guys. I'm the one saying that houses are too expensive for most people to afford. Sheesh.
It's doable, and it depends on your definition of QOL. See the math below.
Gross: 150K
Net per month: 7,500 (exclusive of maxing out 401K, health insurance, life insurance through work, taxes - fed,state and local)
Mortgage: 360K for 30 years at current rates 4.75% assuming borrower has sterling credit: 780-850.
Monthly P&I: 1,878
Taxes: 1,000 (if you want to live on north shore, probably cheaper in other locales)
Insurance: 50 - house only
College sav. 1,000
Train 350 (to and from work)
Utilities 400 (heat, light, water)
Vacation (Hawaii - offering packages for 1,500 per person, kids stay home) 375
Car Ins 95 (how's my gecko, friend)
Cable 100 (as much as I hate them, can't beat the triple play)
Cellphone 75 (his and hers, family plan) Food 300
All other 1,877 (Plenty of buffer for maintenance expenses, savings, etc)
Net: Zero, if you can't manage to save 1,000 per month on a 150K salary, then you really need to read one of those self-help books.
Eh, assuming a 90K downpayment is a bit of a stretch for most people. closing costs another 20K, assuming 110K is really a stretch. That means, PMI, higher interest rates, higher payment buy a few hundred a month.
$50 for home insurance? Where?
$95 for car insurance I'm assuming is one car, but you factor in train so I guess that cancels out.
$100 for triple play is a temporary rate.
$300 for food for a family of 3 means PB&J and Mac and cheese for 3 meals a day.
Anyway, maybe your numbers all work out in the end with the Hawaii vacation taken out.
Honestly, 375K house for a family with 150K income is a better number for Long Island considering the other expenses.
It's doable, and it depends on your definition of QOL. See the math below.
Gross: 150K
Net per month: 7,500 (exclusive of maxing out 401K, health insurance, life insurance through work, taxes - fed,state and local)
Mortgage: 360K for 30 years at current rates 4.75% assuming borrower has sterling credit: 780-850.
Monthly P&I: 1,878
Taxes: 1,000 (if you want to live on north shore, probably cheaper in other locales)
Insurance: 50 - house only
College sav. 1,000
Train 350 (to and from work)
Utilities 400 (heat, light, water)
Vacation (Hawaii - offering packages for 1,500 per person, kids stay home) 375
Car Ins 95 (how's my gecko, friend)
Cable 100 (as much as I hate them, can't beat the triple play)
Cellphone 75 (his and hers, family plan)
Food 300
All other 1,877 (Plenty of buffer for maintenance expenses, savings, etc)
Net: Zero, if you can't manage to save 1,000 per month on a 150K salary, then you really need to read one of those self-help books.
I don't disagree with your note at the bottom - re: self help books. It's basically my point that the original post had a 450k mortgage and I stretched it.
That said, I don't know anyone who would qualify for that rate - not even close. More likely to be in the high 5s or a 6%. I also don't know people who pay only $50 for insurance... lately it's been more about getting dropped and just finding someone to take you. 12k taxes is not exclusive to the north shore. I also don't know anyone who doesn't have at least 1 car payment... I have 3 kids and spend 300 at costco alone TWICE a month. Daycare for the working couple? These aren't small differences.
In the end, it may be doable for a 360k mortgage, but 450k? Also considering how much you'd have to put down to avoid PMI and/or even get the loan at all.
150k combined on LI is not getting you a 550kish house... unless you sell and carry over a huge amount of equity - and that's happening all the time.... not.
I don't disagree with your note at the bottom - re: self help books. It's basically my point that the original post had a 450k mortgage and I stretched it.
That said, I don't know anyone who would qualify for that rate - not even close. More likely to be in the high 5s or a 6%. I also don't know people who pay only $50 for insurance... lately it's been more about getting dropped and just finding someone to take you. 12k taxes is not exclusive to the north shore. I also don't know anyone who doesn't have at least 1 car payment... I have 3 kids and spend 300 at costco alone TWICE a month. Daycare for the working couple? These aren't small differences.
In the end, it may be doable for a 360k mortgage, but 450k? Also considering how much you'd have to put down to avoid PMI and/or even get the loan at all.
150k combined on LI is not getting you a 550kish house... unless you sell and carry over a huge amount of equity - and that's happening all the time.... not.
You make a couple of good points, forgot about the daycare. Forget about a 450K mortgage, the only way someone can get that is if they have substantial cash to put down, and the rates will be in "jumbo" territory: as you say high 5's or 6 - 6.25%.
It's doable, and it depends on your definition of QOL. See the math below.
Gross: 150K
Net per month: 7,500 (exclusive of maxing out 401K, health insurance, life insurance through work, taxes - fed,state and local)
Mortgage: 360K for 30 years at current rates 4.75% assuming borrower has sterling credit: 780-850.
Monthly P&I: 1,878
Taxes: 1,000 (if you want to live on north shore, probably cheaper in other locales)
Insurance: 50 - house only
College sav. 1,000
Train 350 (to and from work)
Utilities 400 (heat, light, water)
Vacation (Hawaii - offering packages for 1,500 per person, kids stay home) 375
Car Ins 95 (how's my gecko, friend)
Cable 100 (as much as I hate them, can't beat the triple play)
Cellphone 75 (his and hers, family plan)
Food 300
All other 1,877 (Plenty of buffer for maintenance expenses, savings, etc)
Net: Zero, if you can't manage to save 1,000 per month on a 150K salary, then you really need to read one of those self-help books.
How much does the house cost in your scenario so that we can see what the saved downpayment was?
If this is supposed to be a no money down deal, then where would anyone find a home for $360K on the North Shore (Nassau)?
Actually taxes on the North Shore on middle class homes are lower than the taxes on their comparable neighbors mid island or on the South Shore (speaking for Nassau).
How much does the house cost in your scenario so that we can see what the saved downpayment was? $90K is the downpayment. $450K is purchase price of the home.
If this is supposed to be a no money down deal, then where would anyone find a home for $360K on the North Shore (Nassau)? Not possible to do a no-money down deal today, unless seller is willing to self-finance transaction.
Actually taxes on the North Shore on middle class homes are lower than the taxes on their comparable neighbors mid island or on the South Shore (speaking for Nassau).
My take is no one should ever feel "rushed" to undetake such a large investment. If you plan on staying in home for a long period of time (10 years +) and can carry it, then ignore the "noise".
The government has only drafted $9 trillion in new debt to pull us out of the last bubble bursting sequence. With all of this cheap money awash in the economy along with generous incentive programs it is no wonder the house values have not crashed. The looming "monster bubble" along with the end of incentive programs, onerous local taxes and rising interest rates will crash home prices in Long island in 2010.
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crash looms
