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I am in a delema, I am trying to figure out if I should keep renting my apartment in NY. My rent is $ 1100+, My combined income with hubby is 103K-107k gross income. We have no kids but hope to have in the future. Credit rating is good mine is 749, dh is 605, here is the problem we have little savings and no money for down payment. we both started our new careers this year. we have one car payment 260month, credit cards=300 and one consolidate student loan=200. I feel like I am going to miss out on tax breaks and pay allot of taxes if I don’t own something. The apartment we rent is cheap for NY but not in the greatest of areas but livable. home priced range here 350K and up. taxes range 6000-14000 year. Need some advice thanks

4 Thoughts on should I buy or keep renting?
  1. Reply
    March 10, 2013 at 12:01 pm

    This is not the time for you to buy. Without a hefty down payment, you may not get financed at all. Or, you could get stuck with a high interest rate.

    Based on your information, assuming 105k in gross income and 6000 in annual homeowner’s taxes, you could afford a house in the range of $ 248 – 304k. So, you’re not there yet.

  2. Reply
    March 10, 2013 at 12:44 pm

    I would wait a year and save a little bit more money. You don’t want to be “house poor”. A $ 350,000 mortgage at 7% is $ 2,328. With taxes, insurance & PMI, it’ll be at least $ 3,250. 605 is a little low. You want to try and get him up to 680. There will be a lot of additional expenses, being a first time home buyer. Good Luck.

  3. Reply
    sara h
    March 10, 2013 at 12:52 pm

    UGH! Sounds like you live close to the city. With your income and your debt vs house prices you are in a bit of a tight spot. As a realtor and former NYer (Long Islander) I would suggest that you work diligently at getting those credit cards paid off and possibly the student loan. This will give you more available cash and you can do some savings. Yes you are missing some tax benefits but you are also missing a really big nut of a mortgage to pay in comparison to your rent. My suggestion would be to see if you can get either a decent rent option situation or a better rental location. The current market is not likely to swing back to where the prices will start increasing for a good while so take the time to improve your financial position while the market is making the necessary adjustments. I just did a quick mortgage calculation for you at $ 350,000 with $ 25,000 down, taxes $ 6,000, insurance $ 850 (rough figures of course) and your mortgage payment would be around $ 2700 monthly. I don’t think in your current position that the purchase would be to your advantage.
    When you are more in a position to buy I would strongly recommend that you get a buyers agent who will help you negotiate the best possible deal given all current information available on your house of interest. You may also want to consider moving out away from the urban areas to a suburban area or upstate somewhere. The situation that you are in is a big reason that I moved to Ocala Florida. The job market is not great but real estate is still doing ok.

  4. Reply
    NY PTK
    March 10, 2013 at 1:05 pm

    Consider this…500K is about $ 3700/month @ ~6.5%. Your credit is good enough to get a reasonable rate between the two of you. Although the market on LI/NYC is changing ( I am assuming by your rent/average home price that you are in Suffolk,) you will be able to pull it off. You are sub prime… Your best shot would be to try and find a home undervalued and in 1 year +/- grab a low % home equity loan and pay off your bills. Right now you are looking just under $ 3000/month for mortgage/taxes/insurance. Additionally, closing costs are important to factor in. That includes attorney, title insurance and bank fees. Sometimes you can factor those into the mortgage…sometimes not. If you need any referalls, email me and I will provide some names to help you along through the process and some areas to look for good values.

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