Mortgage Question
July 27, 2015 9:44 PM
I am thinking about buying a house. I have a great salary but essentially have no money to use as a down payment because I have been focusing on paying off student loans from grad school. Am I eligible for a loan when I could only put down maybe 5% of the purchase price? Again, with my salary i can support a fairly big loan I just do not want to wait the year or so it would take to save the down payment. Any thoughts or advice would be greatly appreciated!
Any thoughts or advice would be greatly appreciated!
There are a surprisingly large number of ways that a house can result in very large expenses that must be paid for quickly in order to maintain a livable abode.
Air conditioner died? $8,000.
Roof needs replacing? $6,000.
Water heater died? $5,000.
If you can't afford a down payment, you can't afford those expenses, which means you can't live in your house.
Before you ask, relying on homeowner's insurance for these expenses is a very bad idea. In general, insurers are not obligated to renew your policy if they perceive you as claiming too much on your policy. In many states, "too much" can be a single claim.
posted by saeculorum at 10:28 PM on July 27, 2015
There are a surprisingly large number of ways that a house can result in very large expenses that must be paid for quickly in order to maintain a livable abode.
Air conditioner died? $8,000.
Roof needs replacing? $6,000.
Water heater died? $5,000.
If you can't afford a down payment, you can't afford those expenses, which means you can't live in your house.
Before you ask, relying on homeowner's insurance for these expenses is a very bad idea. In general, insurers are not obligated to renew your policy if they perceive you as claiming too much on your policy. In many states, "too much" can be a single claim.
posted by saeculorum at 10:28 PM on July 27, 2015
You will have to pay PMI until you reach 20% equity (or a minimum of 2 years) which will cost you an extra 0.5-2.0% of the property value per year. This will be deductible depending on your AGI (it starts to sunset around $100K). It may still be worth it, but that may eat up a lot of what you perceive as being the savings of owning rather than renting. You can make a high bid on properties but pass the closing costs onto the owners in order to reduce the total money needed at closing.
If you have enough credit available to soak unexpected costs like major repairs for a month or two before you can pay it off, you can weather big repairs if necessary. I'm assuming from your statements that you're somewhere around six figures salary.
On the other hand, just a few months ago you wanted to go work overseas. Even if you buy property and rent it out after leaving using a management company, owning property remotely can be a big and costly headache. If you really think you're going to move within a few years, even if it's around the country, I would suggest not buying.
posted by Candleman at 11:40 PM on July 27, 2015
If you have enough credit available to soak unexpected costs like major repairs for a month or two before you can pay it off, you can weather big repairs if necessary. I'm assuming from your statements that you're somewhere around six figures salary.
On the other hand, just a few months ago you wanted to go work overseas. Even if you buy property and rent it out after leaving using a management company, owning property remotely can be a big and costly headache. If you really think you're going to move within a few years, even if it's around the country, I would suggest not buying.
posted by Candleman at 11:40 PM on July 27, 2015
Just because your salary CAN currently support a large monthly mortgage payment, doesn't mean you SHOULD take on a large payment --- never take out the biggest loan/loan payment you can handle: leave yourself some wiggle room in case of emergencies ranging from home or car repairs to needing to repay other unexpected bills.
posted by easily confused at 1:10 AM on July 28, 2015
posted by easily confused at 1:10 AM on July 28, 2015
We are in the same boat, and I've been doing a lot of research on the topic. Summary of my findings is, "Yes, but". A few of the caveats:
-how's your credit? The kind of product you're looking for requires good credit (think 620+ or maybe higher).
-what's the market like? If housing in your area is very expensive, 5% is still a lot of cash, plus you need more for the stuff others mention above. If I were you, I'd stop paying more than the minmum on that debt and start saving. There's also some sort of national mortgage cap at $417k (those of us in high COL areas can all cry together); if you needed to borrow more, loans get "jumbo" and more expensive
-what would your debt to income ratio be? Lenders are going to check your credit and only approve you for as much as you can afford under their % limits. If you can't get enough to afford something in your area, you're SOL.
You should run your finances by a mortgage professional; they can give you solid numbers on what something like this might look like for you. Doing so was really helpful for me. I will MeMail you the name of the nationwide guy I spoke to. Also, look and see if there are first-time home buyer programs in your state/city; there are income limits so that could keep you out of such a program, but it's worth a shot.
posted by ThePinkSuperhero at 3:20 AM on July 28, 2015
-how's your credit? The kind of product you're looking for requires good credit (think 620+ or maybe higher).
-what's the market like? If housing in your area is very expensive, 5% is still a lot of cash, plus you need more for the stuff others mention above. If I were you, I'd stop paying more than the minmum on that debt and start saving. There's also some sort of national mortgage cap at $417k (those of us in high COL areas can all cry together); if you needed to borrow more, loans get "jumbo" and more expensive
-what would your debt to income ratio be? Lenders are going to check your credit and only approve you for as much as you can afford under their % limits. If you can't get enough to afford something in your area, you're SOL.
You should run your finances by a mortgage professional; they can give you solid numbers on what something like this might look like for you. Doing so was really helpful for me. I will MeMail you the name of the nationwide guy I spoke to. Also, look and see if there are first-time home buyer programs in your state/city; there are income limits so that could keep you out of such a program, but it's worth a shot.
posted by ThePinkSuperhero at 3:20 AM on July 28, 2015
Hi! My husband and I bought a condo a few months ago. One of the hard parts was debating how much to put down. Being able to put 20% down would have given us more options.
That said, you might want to look into loans offered by FHA, which are very low down payment. There's also the Neighborhood Assistance Corporation of America (NACA) which I strongly considered. It's really a great deal of you can make it work - no down payment required, no closing costs, low mortgage rates, and you can pay points to reduce the rate even further.
However, there are several hurdles related to NACA that we could not overcome. For starters, there's no income limit but there is a maximum mortgage. In my area, that would have been a major challenge. We also live in a competitive housing market and I worried that NACA would not be able to work with us if we were in a situation with multiple bidders, etc. You also absolutely have to live in the property, which makes sense from their perspective - they're supporting neighborhoods by helping people but homes. But we were concerned that we could never rent out the property. That was less of a concern but the hard mortgage limit was a major challenge. For that reason, we didn't pursue working with NACA so I can't say what it was actually like working with them, beyond that initial info was quite compelling.
posted by kat518 at 3:57 AM on July 28, 2015
That said, you might want to look into loans offered by FHA, which are very low down payment. There's also the Neighborhood Assistance Corporation of America (NACA) which I strongly considered. It's really a great deal of you can make it work - no down payment required, no closing costs, low mortgage rates, and you can pay points to reduce the rate even further.
However, there are several hurdles related to NACA that we could not overcome. For starters, there's no income limit but there is a maximum mortgage. In my area, that would have been a major challenge. We also live in a competitive housing market and I worried that NACA would not be able to work with us if we were in a situation with multiple bidders, etc. You also absolutely have to live in the property, which makes sense from their perspective - they're supporting neighborhoods by helping people but homes. But we were concerned that we could never rent out the property. That was less of a concern but the hard mortgage limit was a major challenge. For that reason, we didn't pursue working with NACA so I can't say what it was actually like working with them, beyond that initial info was quite compelling.
posted by kat518 at 3:57 AM on July 28, 2015
Maybe you could find a rent-to-own situation. This would give you a place to live, time to come up with a down payment, and you can get out of the contract if your plans change.
The downside is it could be very difficult to find an owner who is willing to do this. Also, it would need to be looked at carefully by a lawyer.
I don't hear much about land contract anymore, but that is a possibility if you can find the right seller. Where else can he make 5 or 6% interest?
posted by H21 at 4:39 AM on July 28, 2015
The downside is it could be very difficult to find an owner who is willing to do this. Also, it would need to be looked at carefully by a lawyer.
I don't hear much about land contract anymore, but that is a possibility if you can find the right seller. Where else can he make 5 or 6% interest?
posted by H21 at 4:39 AM on July 28, 2015
Lenders these days will also want to see your assets (savings, IRA, stocks, 401k) to make sure you have the "reserves" to pay the mortgage for 3 to 6 months in the event you lose your job.
posted by JoeZydeco at 4:58 AM on July 28, 2015
posted by JoeZydeco at 4:58 AM on July 28, 2015
Lots of variables in play, so it's difficult for anyone to give you exact advice from a distance. My gut reaction is that if you could save for what seems like a proper down payment within a year's time--that's the best route to go.
On the other hand, programs like kat518 mentions will work very well for many people, especially if it lands the new homeowner in a decent house, a decent location, and a normal, non-weird fixed-rate mortgage.
A real estate agent and/or mortgage broker who specializes in first-time homebuyers in your area would be a big help in navigating through the details.
posted by gimonca at 5:09 AM on July 28, 2015
On the other hand, programs like kat518 mentions will work very well for many people, especially if it lands the new homeowner in a decent house, a decent location, and a normal, non-weird fixed-rate mortgage.
A real estate agent and/or mortgage broker who specializes in first-time homebuyers in your area would be a big help in navigating through the details.
posted by gimonca at 5:09 AM on July 28, 2015
It's certainly possible to get a conventional mortgage with 5% or less down with good credit. With mortgage interest rates being low, it's possible it would make financial sense to take the PMI hit and keep paying off your loans. YMMV.
posted by ndg at 6:20 AM on July 28, 2015
posted by ndg at 6:20 AM on July 28, 2015
Short answer: Yes you can get an FHA loan (and possibly others) for 5% down. I just did it.
More detail: As others have said, it's not wise to take out the biggest loan you qualify for, but that should be pretty obvious. And the lenders will usually say you are qualified for a much bigger payment than you'll want to pay.
With decent income and a moderate payment, you should have money for upkeep as well. Major problems should show up on a pre-sale inspection, and those can be negotiated prior to sale so that you don't have an immediate major issue to pay for. (Aside: $5,000 water heater? Sounds extreme.)
You have nothing to lose by talking to a lender. Your own bank is a good place to start. Just avoid "new house fever" and don't get in a rush.
posted by The Deej at 6:24 AM on July 28, 2015
More detail: As others have said, it's not wise to take out the biggest loan you qualify for, but that should be pretty obvious. And the lenders will usually say you are qualified for a much bigger payment than you'll want to pay.
With decent income and a moderate payment, you should have money for upkeep as well. Major problems should show up on a pre-sale inspection, and those can be negotiated prior to sale so that you don't have an immediate major issue to pay for. (Aside: $5,000 water heater? Sounds extreme.)
You have nothing to lose by talking to a lender. Your own bank is a good place to start. Just avoid "new house fever" and don't get in a rush.
posted by The Deej at 6:24 AM on July 28, 2015
Yes, it's entirely possible (I did it last year), but in my experience you probably want 8-10%. I paid 5% down payment and had the seller cover closing costs. The rest went into last-minute house funds, which I used a month later when my insurance threatened to cancel our policy if I didn't replace the roof immediately (side note: spend good money on a great inspector). Because of some weirdness with my circumstances I didn't go with an FHA loan, but my excellent credit score cancelled out the small down payment so I ended up with a pretty great rate anyway. I've got PMI but all told it's still cheaper than renting.
So my tips are:
posted by specialagentwebb at 6:31 AM on July 28, 2015
So my tips are:
- check your credit score. you want to have top-notch credit if you're only putting down 5%
- 8-10% of the house price in comfortable savings (so you wouldn't be stretched for your normal bills if you had to spend it all)
- find a realistic price you can afford (and good lord do not use zillow's "how much can I afford" calculator) and don't even look at houses outside that range
- find a realtor that you like and trust. you're going to be spending a lot of time with him/her, and they can clue you in to how the market is moving
- get the seller to pay closing costs if it's normal in your area. your realtor can advise you on this
- DO. NOT. SKIMP. ON INSPECTIONS.
posted by specialagentwebb at 6:31 AM on July 28, 2015
What everyone said above - BUT, if you are in a hyper-competitive market (low inventory, less than 7 days on market, more than 5 offers), you will lose lots of offers to people who bring 20% or pay cash in full. Talk to your realtor and lender, they will walk you through everything. It is possible, though, you just have to work harder.
posted by matildaben at 6:58 AM on July 28, 2015
posted by matildaben at 6:58 AM on July 28, 2015
That said, you might want to look into loans offered by FHA, which are very low down payment.
Or USDA's Section 502, which limits you to 'modest houses' in more rural areas. That still generally requires a chunk of money at closing, especially if you want to avoid PMI, and a lender that's familiar and comfortable with the process -- a broker or buyers' agent will know who specialises in those loans in your area.
But as others have said, can doesn't mean should. The rule of thumb for buying is that it'll take 5-7 years to break even on a sale, and the kind of houses one can buy in your situation are often harder to sell or rent out. If you aren't certain you'll be where you are now in 2020, don't pull the trigger.
posted by holgate at 7:26 AM on July 28, 2015
Or USDA's Section 502, which limits you to 'modest houses' in more rural areas. That still generally requires a chunk of money at closing, especially if you want to avoid PMI, and a lender that's familiar and comfortable with the process -- a broker or buyers' agent will know who specialises in those loans in your area.
But as others have said, can doesn't mean should. The rule of thumb for buying is that it'll take 5-7 years to break even on a sale, and the kind of houses one can buy in your situation are often harder to sell or rent out. If you aren't certain you'll be where you are now in 2020, don't pull the trigger.
posted by holgate at 7:26 AM on July 28, 2015
Yes you can. I don't know the specifics of your situation so it's not my place to say whether or not it's a smart decision, but it can definitely be done. Look into FHA loans; I think they require a 3.5% down payment.
I bought a house 3 years ago with no down payment. I qualified for a very specific type of mortgage loan because of my job that most people wouldn't qualify for, but it was actually the smartest decision for me at the time. My mortgage payment plus taxes and insurance is under $1100 per month on an 1800sf house. To rent a nice apartment would have been around 1000 a month, and I would have had to live further away from work to find an apartment I was happy with. I don't have it anymore, but look into a home warranty. I had one the first two years I owned the place, and for about $500 a year they will repair or replace any appliance that breaks for about a $100 deductible. I used it to replace a faulty dishwasher.
There will always be people who tell you it's not smart to buy. In my area and in my situation, it was almost a no brainer. Good luck!
posted by pimmscup at 7:41 AM on July 28, 2015
I bought a house 3 years ago with no down payment. I qualified for a very specific type of mortgage loan because of my job that most people wouldn't qualify for, but it was actually the smartest decision for me at the time. My mortgage payment plus taxes and insurance is under $1100 per month on an 1800sf house. To rent a nice apartment would have been around 1000 a month, and I would have had to live further away from work to find an apartment I was happy with. I don't have it anymore, but look into a home warranty. I had one the first two years I owned the place, and for about $500 a year they will repair or replace any appliance that breaks for about a $100 deductible. I used it to replace a faulty dishwasher.
There will always be people who tell you it's not smart to buy. In my area and in my situation, it was almost a no brainer. Good luck!
posted by pimmscup at 7:41 AM on July 28, 2015
Re-reading your question, this jumped out at me: "I just do not want to wait the year or so it would take to save the down payment."
My husband and I actually talked about four years ago to a realtor about buying a place. We were interested but we weren't ready. Among other reasons, we didn't have a down payment lined up. I had money in a savings account but if we had put that all in, we would have struggled if something had gone awry. So we waited. My husband quit his job and started a company. I got a new job that paid more and kept putting money in the savings account.
This winter, we started looking at places in earnest. We saw one that we really liked but knew we didn't have our things together. If we wanted to make a bid, we didn't know how or what to do next. So I called the realtor we talked to four years earlier. We got pre-qualified and looked at a few more places. We saw one place and thought, this checks all the boxes for the things we're looking for. A few days later, I called the realtor and said we were interested in putting in an offer. We closed 24 days later.
We didn't spend every moment over those intervening four years thinking about buying a place. I just set up a direct deposit with my savings account and didn't touch that money. We paid bills on time and had great credit scores (790s). I casually looked at neighborhoods and how much places were selling for, how long places stayed on the market, what developers were better than others. I met another realtor who explained that in my market, 50% of housing sells within 30 days, 75% within 60 days, so if it's on the market for longer, there's likely an issue. I talked to friends who bought places who told me that a contract should include contingencies for financing, appraisal, and inspection.
What I'm trying to say is that the time between our offer and close flew by but the four years in between the time I first met our realtor and I came back to him to say we were serious, that time was at least as important. Unless you're flipping the place you want to buy, you're talking about making a 30 year investment and you don't have a year or two to save money for the down payment? What's the rush? There are good reasons to move quickly but being able to buy a home with financial breathing room might be worth waiting for.
posted by kat518 at 8:51 AM on July 28, 2015
My husband and I actually talked about four years ago to a realtor about buying a place. We were interested but we weren't ready. Among other reasons, we didn't have a down payment lined up. I had money in a savings account but if we had put that all in, we would have struggled if something had gone awry. So we waited. My husband quit his job and started a company. I got a new job that paid more and kept putting money in the savings account.
This winter, we started looking at places in earnest. We saw one that we really liked but knew we didn't have our things together. If we wanted to make a bid, we didn't know how or what to do next. So I called the realtor we talked to four years earlier. We got pre-qualified and looked at a few more places. We saw one place and thought, this checks all the boxes for the things we're looking for. A few days later, I called the realtor and said we were interested in putting in an offer. We closed 24 days later.
We didn't spend every moment over those intervening four years thinking about buying a place. I just set up a direct deposit with my savings account and didn't touch that money. We paid bills on time and had great credit scores (790s). I casually looked at neighborhoods and how much places were selling for, how long places stayed on the market, what developers were better than others. I met another realtor who explained that in my market, 50% of housing sells within 30 days, 75% within 60 days, so if it's on the market for longer, there's likely an issue. I talked to friends who bought places who told me that a contract should include contingencies for financing, appraisal, and inspection.
What I'm trying to say is that the time between our offer and close flew by but the four years in between the time I first met our realtor and I came back to him to say we were serious, that time was at least as important. Unless you're flipping the place you want to buy, you're talking about making a 30 year investment and you don't have a year or two to save money for the down payment? What's the rush? There are good reasons to move quickly but being able to buy a home with financial breathing room might be worth waiting for.
posted by kat518 at 8:51 AM on July 28, 2015
The short answer is, yes, there are mortgages with 5% down, or even 3.5% down. They are more expensive with PMI and such, and you would have to ask seller for closing (which not all of them are wiling to do, especially in a hot market).
If you don't have a long or good credit, your lender may ask you to prove that you have 6 months' PITI payments saved up. This can be in retirement funds (though for me, I think they discounted that by 50% since you'd take a penalty to access them). But if you literally had no money and short/bad credit, you may not qualify.
However, I would think very long and hard about buying a house with so little down. (I did this! But I had another 5-10% in the bank in cash when I bought.) You need money to move, and most people like to paint, replace flooring, or do some work on the house before everything is moved in. If you don't own yard tools, you'll need to get the lawnmower, weed wacker, etc etc and those can add up. That costs money.
And if anything breaks at all, it's easily in the 4 figures. In the first year I owned the house, I had to replace the roof, fix the drain under the tub, get the water heater fixed, and also touch up on the masonry for the chimney. That's in addition to the planned work (which included replacing windows, floors, repainting, and putting in window treatment). Let me just say that I truly learned how expensive homeownership is.
And if you lose your jobs, you're now stuck with your large mortgage payment *and* all the repairs that you might need to do.
Basically, I would have a bunch of cash stockpiled before buying a house. Don't necessarily spend all of it on your down payment, but it'll be good to have it there.
posted by ethidda at 10:27 AM on July 28, 2015
If you don't have a long or good credit, your lender may ask you to prove that you have 6 months' PITI payments saved up. This can be in retirement funds (though for me, I think they discounted that by 50% since you'd take a penalty to access them). But if you literally had no money and short/bad credit, you may not qualify.
However, I would think very long and hard about buying a house with so little down. (I did this! But I had another 5-10% in the bank in cash when I bought.) You need money to move, and most people like to paint, replace flooring, or do some work on the house before everything is moved in. If you don't own yard tools, you'll need to get the lawnmower, weed wacker, etc etc and those can add up. That costs money.
And if anything breaks at all, it's easily in the 4 figures. In the first year I owned the house, I had to replace the roof, fix the drain under the tub, get the water heater fixed, and also touch up on the masonry for the chimney. That's in addition to the planned work (which included replacing windows, floors, repainting, and putting in window treatment). Let me just say that I truly learned how expensive homeownership is.
And if you lose your jobs, you're now stuck with your large mortgage payment *and* all the repairs that you might need to do.
Basically, I would have a bunch of cash stockpiled before buying a house. Don't necessarily spend all of it on your down payment, but it'll be good to have it there.
posted by ethidda at 10:27 AM on July 28, 2015
Someone said in relation to air conditioners or furnaces breaking down
> Before you ask, relying on homeowner's insurance for these expenses is a very bad idea. In general, insurers are not obligated to renew your policy if they perceive you as claiming too much on your policy.
Homeowner’s insurance simply does not cover these events. It is not designed to cover them. It is, instead, intended to cover accidental loss caused by “covered perils” such as wind, rain, vandalism, and most importantly, fire.
Machines breaking down in the house are simply not covered - unless they cause a loss that fits the covered peril description, and, even then, not always.
posted by megatherium at 7:09 PM on July 28, 2015
> Before you ask, relying on homeowner's insurance for these expenses is a very bad idea. In general, insurers are not obligated to renew your policy if they perceive you as claiming too much on your policy.
Homeowner’s insurance simply does not cover these events. It is not designed to cover them. It is, instead, intended to cover accidental loss caused by “covered perils” such as wind, rain, vandalism, and most importantly, fire.
Machines breaking down in the house are simply not covered - unless they cause a loss that fits the covered peril description, and, even then, not always.
posted by megatherium at 7:09 PM on July 28, 2015
I bought my first house with 3% down using an FHA loan. To deal with repair costs, I had a home warranty which the seller bought the first year (and I renewed afterward). Yes, I paid PMI and it was sort of a bummer to do that, but it allowed me to get into the market and eventually I sold that house at a profit and bought my next one.
So yes, if you are willing to take some risk you certainly could purchase.
posted by 26.2 at 9:36 PM on July 28, 2015
So yes, if you are willing to take some risk you certainly could purchase.
posted by 26.2 at 9:36 PM on July 28, 2015
A home warranty contract (NOT homeowner's insurance) can cover the cost of repair for many (but certainly not all) of the major systems that might break. In our market, it is common for the seller to pay for all or half of the cost for the first year since it avoids major arguments between the buyer and seller if something breaks. Just be aware, that like most insurance products, it is priced to make money for the insurance company - on average your premiums are more than the expect payout in any given year. So, if the seller is paying, it is a great deal. After the first year, you only want to continue if you are willing to give the home warranty company some money in exchange for less risk of maybe having to pay out a whole lot.
posted by metahawk at 10:02 PM on July 28, 2015
posted by metahawk at 10:02 PM on July 28, 2015
frednorton, I saw from one of your previous questions that you're a lawyer. Talk to some banks and see if any of them have special mortgage deals for attorneys. From a brief Google search it looks like attorneys can qualify for specialty loans similar to those physicians and other professionals can get that have competitive interest rates and low or zero down payments. Banks are often willing to do this because they see professionals as in a unique position where we have stable careers, high future earnings almost guaranteed, and yet we all have mountains of grad school debt, so unlike many of our peers we have had no chance to save up cash when we're in our late 20s/early 30s. Plus, banks want our business so 20 years down the road when we're bazillionaires, they can benefit from that too. I don't know details of which banks are offering these kind of deals now, or what area you live in, but it's worth looking into!
Also -- I'm genuinely curious about this. To all the people saying that there's no rush to buy. Are rental costs more reasonable in other parts of the country? There's no way I could afford to rent a house here for anywhere close to my monthly mortgage payment, and when I sell my home after living here 4 years I will almost certainly break even if not make a little money from the sale. The city I'm moving to next year is the same way -- we're probably going to rent at first because we don't know what area we'll end up in, but we'll be spending FAR more each month on rent for an apartment/townhouse than we would on a mortgage for a 3-4 bedroom house if we decided to buy.
posted by pimmscup at 5:05 PM on July 30, 2015
Also -- I'm genuinely curious about this. To all the people saying that there's no rush to buy. Are rental costs more reasonable in other parts of the country? There's no way I could afford to rent a house here for anywhere close to my monthly mortgage payment, and when I sell my home after living here 4 years I will almost certainly break even if not make a little money from the sale. The city I'm moving to next year is the same way -- we're probably going to rent at first because we don't know what area we'll end up in, but we'll be spending FAR more each month on rent for an apartment/townhouse than we would on a mortgage for a 3-4 bedroom house if we decided to buy.
posted by pimmscup at 5:05 PM on July 30, 2015
pimmscup- In my area, NYC, for me to buy an equivalent sized apt in my neighborhood (old walkup, no building ammenities) I would need to pay $795k minimum. The downpayment on that is $160k... and saving that kind of money is a multi year/decade process (while prices KEEP RISING). A mortgage for 635k would still be about 2.5k a month + monthly maintanance fees. I fully admit NYC real estate is crazypants, but San Francisco is more insane, LA is almost as pricey, Boston is starting to get kind of nuts, DC is pretty bad, and other major cities are edging up there.
posted by larthegreat at 10:57 AM on July 31, 2015
posted by larthegreat at 10:57 AM on July 31, 2015
Wow. Just reading those numbers make my head hurt! Move to the south and in most cities you can buy a 2-3 bedroom, 1800 square foot house in a desirable neighborhood for less than the price of the down payment on that apartment. And zero to very little HOA fees. (Of course, we probably make a lot less... But still.)
posted by pimmscup at 7:44 PM on July 31, 2015
posted by pimmscup at 7:44 PM on July 31, 2015
This thread is closed to new comments.
That said, buying a house is about more than just the downpayment. You also need to pay for closing costs (which can be 3-7% of the home price), an inspection (can cost $200-500), and any repairs the home needs before move-in. So definitely assume you will need to a good cushion in addition to that downpayment.
posted by joan_holloway at 10:07 PM on July 27, 2015