Determining Budget for an Apartment Purchase

Don't purchase an apartment where your debt to income ratio exceeds 30% in order to live comfortably and be able to save.

Example:
Monthly income = $9,000 (Gross)
Average debt for a single bedroom coop in UES (Monthly Mortgage and maintenance) = $4000

Debt/income = 4000/9000 = 44%
Since 44%>30% then your income does not qualify!

Don't purchase an apartment where your debt to income ratio exceeds 30% in order to live comfortably and be able to save.

Example:
Monthly income = $9,000
Average debt for a single bedroom coop in UES (Monthly Mortgage and maintenance) = $4000

Debt/income = 4000/9000 = 44%
Since 44%>30% then your income does not qualify!

To afford $4000 a month in mortgage and maintenance, your monthly income should be greater than $13,000

That calculation is way too simplistic. It depends on a lot of factors. You should get a sense of your overall lifestyle and spending. Some people prefer to spend more money going out to eat or clubs, some people prefer to put more money into clothing, some into their apartments. You should figure out what makes you comfortable. Especially at higher levels of income, where you've got all the basics covered and a lot of your spending is discretionary, I wouldn't worry so much about putting more of that discretionary spending into housing, if that's what you want.

Don't be a retard - if you pay 40% taxes and 35% on the little cube you're going to be sleeping in, what are you going to live off?

#5, OP here. No reason to be rude ("don't be a retard"); I am asking the question because I am not sure what is considered reasonable, especially in light of sky high Manhattan prices. As to your question regarding what is left if you pay 40% in taxes and 35% on the cube, well, duh, 25% is left. Obviously, it matters what your income is in evaluating whether or not you have enough. In my case, it is $400,000, which would leave $100,000 after taxes and shelter. Seems like enough for my wife and I (plus possible child). However, maybe not; there wouldnot be much in the way of savings left over. 35% of $400,000 sounds like a lot to spend on housing to me in any event.

#6 your question was an interesting one. I thought I could only afford a certain amount but the broker I worked with said I could afford 1/3 more. It's really about your lifestyle, vacations, etc.

#6 your question was an interesting one. I thought I could only afford a certain amount but the broker I worked with said I could afford 1/3 more. It's really about your lifestyle, vacations, etc.

and of course you're guaranteed to make $400k forever and ever, and there's no chance you'll stop making as much... the youth of today

"... the youth of today"

OP here. Sadly (sigh), I am not young. Of course, there is always risk. I could lose my job. Stuff happens. Barring that, my salary should be pretty stable and is not based on any boom year bonus, etc.

Hey OP--- for me, the benchmark is 35% of take home and I'm north of 300K. However, I'm fairly conservative and some folks I know go with 35-40% of gross, some even up to 50% of gross. For me, thats too high but its all sbjective based on risk tolerance (or aversion).

I'm more conservative and am an 'under 25% of our monthly gross take home pay' guy. But that meant in our case putting down a bigger deposit to carry a smaller mortgage. Part of the deal is -

.how comfortable you are putting money in to your home for the long term.

.whether you consider that money to be 'investment' or not (we don't consider our condo an 'investment' per se, so if it goes down [or up, for that matter] in value a certain percentage, we're not affected monetarily).

.whether you prefer (or need) to use that extra down payment money instead for potential investment leverage.