All you real estate guys....
#1
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All you real estate guys....
I think I'm finally ready to buy a place. Me and the wife have been looking for a couple weeks. We saw a bunch of condos last weekend. 2 were really nice, but found faults with both. What we're looking for is 2 to 3 bedrooms, with 2 bathrooms. 3 bedrooms will be great.
Couple questions.....
1. About how much of you income do you dedicate to your mortgage/taxes etc. I live in Jersey where everything is expensive, so I'm assuming that I'll be paying a bit more. Jersey guys, how much should I be paying for a decent place?
2. Should I try to fork over more and go with a town house? It's the 2 of us and we're expecting a baby in June. We're going to go look at a couple town houses tonight.
3. How many of you are doing one of those "Interest-only" mortgages? I was thinking about going this route so I have some extra cash for the kid, but paying a bit more every month.
4. If you live in New Jersey, and have any good area that I can look at, please let me know. I work in Newark and Manhattan. But we looked as far south as South Brunswick. The condos I liked were in North Brunswick and Halmetta. Tonight, we go to Sayreville, and maybe a couple more in North Brunswick.
Couple questions.....
1. About how much of you income do you dedicate to your mortgage/taxes etc. I live in Jersey where everything is expensive, so I'm assuming that I'll be paying a bit more. Jersey guys, how much should I be paying for a decent place?
2. Should I try to fork over more and go with a town house? It's the 2 of us and we're expecting a baby in June. We're going to go look at a couple town houses tonight.
3. How many of you are doing one of those "Interest-only" mortgages? I was thinking about going this route so I have some extra cash for the kid, but paying a bit more every month.
4. If you live in New Jersey, and have any good area that I can look at, please let me know. I work in Newark and Manhattan. But we looked as far south as South Brunswick. The condos I liked were in North Brunswick and Halmetta. Tonight, we go to Sayreville, and maybe a couple more in North Brunswick.
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Try this site to see how much of a home you could reasonably afford.
http://www.talkaboutmortgages.com/Ca...rdability.aspx
http://www.talkaboutmortgages.com/Ca...rdability.aspx
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Ha, I can help a little since I'm going through the process right now
1. A good debt/income ratio to stick to is around 34% overall. That's all debt payments to GROSS income. That typically makes your mortgage payment about 25% of your gross income. But that can fluctuate depending on other debts that you have. EDIT - Note: some lenders will tell you that you can get away with a debt/income ratio as high as 50%, but keep in mind that they are in the business of selling you debt, so they might be willing to lend you that much, but that doesn't mean you can or should take it.... maxed out is stressed out.
2. Not sure what you mean by "more", you gave no frame of reference. But it all depends on your financial situation and how much you're willing to sacrifice.
3. Having the interest only option is nice, but paying the minimum is no better than renting. If you're really responsible and make a payment more than the minimum each month, then I'd say go for it, as long as you resolve to just pay the minimum only when it becomes really really necessary to use the extra money for something else.... like in case of emergency.
4. I know nothing about new jersey, except that the whole state, apparently, sucks
1. A good debt/income ratio to stick to is around 34% overall. That's all debt payments to GROSS income. That typically makes your mortgage payment about 25% of your gross income. But that can fluctuate depending on other debts that you have. EDIT - Note: some lenders will tell you that you can get away with a debt/income ratio as high as 50%, but keep in mind that they are in the business of selling you debt, so they might be willing to lend you that much, but that doesn't mean you can or should take it.... maxed out is stressed out.
2. Not sure what you mean by "more", you gave no frame of reference. But it all depends on your financial situation and how much you're willing to sacrifice.
3. Having the interest only option is nice, but paying the minimum is no better than renting. If you're really responsible and make a payment more than the minimum each month, then I'd say go for it, as long as you resolve to just pay the minimum only when it becomes really really necessary to use the extra money for something else.... like in case of emergency.
4. I know nothing about new jersey, except that the whole state, apparently, sucks
Last edited by ccannizz11; 03-14-2006 at 11:59 AM.
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Originally Posted by ccannizz11
4. I know nothing about new jersey, except that the whole state, apparently, sucks
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Originally Posted by RaviNJCLs
3. How many of you are doing one of those "Interest-only" mortgages? I was thinking about going this route so I have some extra cash for the kid, but paying a bit more every month.
The one nice thing about the interest only loan is the interest payment adjusts every month if you pay extra principal. We're continuing to pay the extra $1000 but it's getting closer to $1200 extra since the interest payment is dropping.
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Originally Posted by NSXNEXT
But we are paying an extra $1000 in principal each month. As mentioned, if you're just going to be able to afford the interest only payment, either buy a cheaper place or wait till you can afford to pay extra principal.
The one nice thing about the interest only loan is the interest payment adjusts every month if you pay extra principal. We're continuing to pay the extra $1000 but it's getting closer to $1200 extra since the interest payment is dropping.
The one nice thing about the interest only loan is the interest payment adjusts every month if you pay extra principal. We're continuing to pay the extra $1000 but it's getting closer to $1200 extra since the interest payment is dropping.
Right now I live in Jersey City. But we're ready to move.
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Originally Posted by RaviNJCLs
The reason I was looking at the interest only option was that I don't want to keep moving.
Keep in mind that let's say you get a 5/1 interest only. The first five years are interest only payments, on year 6 it converts to a conventional 25 year mortgage.
Here are two examples, both of which are not good.
1 - You pay the minimum interest only payment. Year 6 rolls around and basically you've paid nothing into principal. So now you are going to have to eat a 25 year mortgage (30yr minus 5 yrs of interest only) at the interest rate they set. Interest only mortgages are very similar to adjustable in that the rate changes each period but doesn't kick in until the initial period is over (5 yrs). So you could "potentially" have an interest rate in the 7 or 8 percent range (or more) for the next 25 years. you could refinance, but that ain't cheap and who knows what the interest rate will be in 5 years.
I suggest you do some research on the max the interest rate can rise and see what worst case would be. I think you might realize you'd be in waaaaay over your head in year 6.
2 - You make additional principal payments, but your mortgage is till 90 - 95% of what you originally took out. See option 1 for next step.
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In my case, we took out a 7/1 IO mortgage but we have no plans to be here more than 5 years. We are making hefty principal payments to accrue equity so when we decide to sell, we've got a nice down payment on the next place.
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Originally Posted by NSXNEXT
In my case, we took out a 7/1 IO mortgage but we have no plans to be here more than 5 years. We are making hefty principal payments to accrue equity so when we decide to sell, we've got a nice down payment on the next place.
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