Income level and maximum mortgage size

I think if you have a proven W2 history, most typical lenders will offer 3.5x yearly income. Note that jumbo loans right now are carrying an unusual rate premium over 417k conforming.

Thanks - regarding jumbo, who knows when that might change, right? It could be that way for the next 3 years ..

Go back to Chicago loser, 600k is nothing for this city. I bet you thought when you wrote that number people would be impressed. Get over yourself peon.

How can someone who makes 600k a year not know what they qualify for? Did Dad give you a job in the family business? Or did you actual have to have a brain for that position.

wager you are obviously an angry low level moron with too much time on your hands. And even if you are a business world powerhouse there is still clearly something fundamentally wrong with you. Where does that bitterness come from?

The only reason I provided that number was for constructive readers to have a data point to work with. In terms of qualification, credit markets have changed since I last got a mortgage, so I thought I would ask.

By the way, I may be a peon in NYC but I'm thankful and satisfied with my life and for what I have, which is more than can be said for most big money earners in this city.

600K is more then what most earners in NYC are making !

Far from a peon

aboout 3-3.5x sems right with no problems. 3 years of monthlies liquid is actually very conservative -- you could probably get away with alot less . . .

600k a year, for a job that is not correlated with the wall street cycle, is a lot of purchasing power. i'm guessing partner in intellectual property law firm??

Is that 3-3.5 x income a good standard to go by for all properties? What if you are buying a property w/ income producing apartments?

Indeed I am in law, although not IP. Good call.

In any case, returning to topic at hand - is it 'normal' and prudent to pull a 1.8M mortgage on a 3.7M property at that income level .. thats the question. Although I do feel that manhattan real estate is at a peak my outlook is 7-10 years and the unit we are looking at is in a prime location, has excellent light and good views, and is a 4BR/4BA in a new condo. As such it does not seem to be a terribly risky proposition, but will require most of our savings to be put into the downpayment. Thats whats scary.

duecescracked, would you mind following up with this board once you discuss available terms with the bank? I would be interested to hear results of securing that type loan in the current credit market.

markznyc, do you think they will make him split it?

will do - am going to start making some calls shortly. may get totally shut down. as they say, if its meant to be ..

as for financial prudency, you should check with a tax accountant or financial planner

Not sure about current market, but I secured a jumbo about 6 months ago (eons, I know) at about 3.57x salary with probably 1 year in reserve, if that. Put down about 40%, so based on this situation not too far off. My guess is that there are still some aggressive mortgage brokers looking to make some $ and will bend over backward to try to place a loan of this size. I found that the bankers were actually much less aggressive, so although I hate farming out anything I could do myself, I would find a good mortgage broker focused on jumbos and have him shop it - I doubt it will need to be split.

markz - was that 3.5x salary alone or did you factor in any applicable bonus component?

I called e-loan, which is a sort of lender/broker and they said they could do the mortgage (30yr fixed at 6.625%) based on the above data and subject to the usual assets and income verification. So in principle it seems feasible .. all-in debt/gross income had to be less than 50%

for a loan like that you may want to see if your current bank can refer you to their high net worth department. if you are willing to be a hnw client*, banks will treat you differently than normal walk in customers. a buddy of mine at work got his 1mm+ jumbo in a few days with better pricing and service through that kind of set up.

*you'd have to keep probably 1mm or so in a brokerage account there, or something like that.

3.5 including bonuses; the high net worth thing may be an option . . unfortunately all of my net worth went into my apt!

from your posts and salary level i'd say you're an of counsel at a mid to large law firm (perhaps a (very) junior partner) moving to the home office. as such, two things: why you are seeking advice from an anonymous board as to financing matters, i do not know. second, putting down "most" of your savings into a down payment is in a word. stupid. get a house in the suburbs and a pied a terre for you in the city. you'll get more bang for your buck in the burbs and will actually be able to bargain. you'll be amazed that you'll get more for your money doing it this way.

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totallyannonymous, that is the most rational thing that has ever been posted on this board. Every top-tier suburb around Manhattan is completely in the shitter (I know, I own in Greenwich and in Manhattan) and if people start looking around they'll see that putting your whole life savings into a Manhattan apt. right now is completely retarded...but there are plenty of retards on this board....

JN--I am going this route as well, albeit not in greenwich. However, I will say that I paid below market for both properties (of course assuming the market does not drop another 10%). Had I focused on pouring all my resources only into a Manhattan dwelling, and I did for a while, I'd get nothing close to the what I will have now. That and I'd have to worry about having overpaid and losing equity in the short term and having to upsize once the kiddies start popping out. Not a pretty scenario. For me, the end game was suburbia anyway, so i figure i'd jump on a deal now while i still can (although sure probably could have gotten a deal if i waited some more, but my situation dictated otherwise).

The way I figure, I have an extra bedroom in my house, only its in NYC. Plus, it diversifies you in a downturn. I don't understand why more people don't do this (or perhaps they do). In the current market, you can get a house and pied for the same price as many Manhattan apartments. and on the weekends, its nice to get the hell away. For me though, raising kids in the city was never an intention. I grew up here and do not want my kids doing the same.

TA, thanks for posting. I have followed a similar strategy and very happy with the results. I have a great house in a prime neighborhood close to where my wife grew up (Southeast) that costs next to nothing. It is my hedge for both the real estate market and for a growing family. Plan is to always have a place in Manhattan, even if it is not the primary residence.

Curious, why don't you want your kids to grow up on the city?

Missed the whole point JN/TA. Living in nyc is a lifestyle choice -- not an investment.

No matter what someone says a pied a terre will barely be used unless you are 55, no kids, no job.

This was not a discussion of the burbs vs. the city, but what to do if you WANT to live in Manhattan.

I walk to work, stop by the grocery for dinner on my walk home, walk my kid to the museum (lots of those in Westchster, right?), and will be walking him to school on the way to work soon. For me that is pretty idyllic and well worth the "premium". The time I would be spending sitting on the metro north so I could "get a great deal" at the expense of time with my family and my sanity would never be worth it.

So for me -- and I am sure many others -- paying a premium isn't a "dumb" choice. It is the right choice and the one that fits what they value most -- time, culture, convenience.

I think the OP already made that decision, too.

marznyc - exactly.

I'm obviously aware that i could get a 5000sq ft mansion in southern CT for half the price of a 3BR manhattan apartment. However whats that going to mean for my lifestyle? The wife and kids are an hour+ away during the week and I sleep in a 1BR apartment by myself? Weak.

Besides, part of the reason we moved to NYC versus other options like Boston or DC was that we liked the idea of having such a rich environment for our family - fine dining, groceries, museums, theater, concerts, shopping, etc. All within minutes on efficient public transportation.

So at this point we are pretty sure that we don't want the burb life, at least for 5-7 years. So the question is: get in on something now that will serve us for a long time and has room for family growth but is in the upper bounds on the financial side, or wait it out a few months to see what the new year brings on wall st and NYC RE with the risk of missing out on something that we feel is pretty unique?

Totallyanonymous: I would also appreciate hearing your comments on kids in manhattan. Personally, we are making the rather large assumption that we will raise our kids here for a number of years. We are new to the scene though and may still be in our honeymoon phase with the city.

Assume living in the city saves you 1 hour commute each way to your suburb of choice.
2 * 1 hours = 2 hours / day
2 hours / day * 5 days / week = 10 hours / week
10 hours / week * 48 weeks / year = 480 hours / year commuting.
480 hours / year * 1 day / 24 hours = 20 days / year commuting.

20 days! That's 5% of your life commuting.
That's why we chose to live in the city. Time is money.

I wont be commuting except on Fri (out of City) and Mon (to city). Actually, most of the people I know here do that anyway but they travel on the weekends. Only difference is I'll be going to see the wife. This living situation may not be suitable for all, but it works for us. We have no kids yet.
As to kids, I personally wouldn't raise my kids here because of safety. That and b/c they're exposed to too much and you have little control over it. It may be a case of the grass is always greener but the quiet(er) suburban life to me suits child rearing more than does the city existence. and the wonderful thing about this city is the beautiful suburbs are an hour or so away. Having grown up here, I can tell you that I do not think there is any marked difference between me and the people I knew and those kids (now adults) who grew up in the burbs, or in Osh Kosh for that matter. Perhaps there's a level of "street smarts" you get from growing up here but its not a guarantee that your kids will have them nor are those street smarts necessarily any keener than some kid who grew up in the cornfields of iowa. There are plenty of losers who grew up in manhattan. Plus, when you have a place in the city, when you want your kids here, you can bring them here. When you want to play in the backyard, you can do that. It beats them playing in the staircase or having elevator races or throwing water balloons from the 34th floor or riding their bikes on 34th street w/o a helmet or going on subway races. this is what kids do in this city. and god forbid you have a daughter here. keep her away from guys like me (before i was engaged).

I would be interested to hear what the real vs. perceived issue with "safety" is in the city these days now that violence is at an all time low.

I grew up in the burbs, where every weekend we were bored, ended up being drunk on our parents booze and driving intoxicated like maniacs around the neighborhood. I can think of nothing less safe than that.

Oh -- maybe going to a shopping mall in the midwest. That seems a little bit worse. Or maybe the suburban meth labs. Or school shootings. Or the reckless driving (#1 killer of teens).

I like my kids dangers nice and evident like they are in the city. I have one of the most beautiful parks in the world a block away from me and every time killer for kids known to man within a 15 minute subway ride.

I will take that over a backyard any day.

TA, no offense, but I couldn't imagine commuting once a week to see my wife/kids. That would be 2/7 of a marriage, which just doesnt seem right. I am sure when you have kids you will feel the same way and that apartment in the city will be sold (for a tidy profit I hope) and you will be back on a daily Metro North loop. Good luck and to each his own!

TA: I hear you, I think there are pros and cons to raising kids in any environment so that is a matter of personal preference. Perhaps a new thread should be started discussing raising children in the city. One issue that does concern me is the overcrowding of schools ..

kids are great in Manhattan until they get blown up on the subway....they ain't bombing New Jersey...unless you live at the refinery...

re: raising kids in the city, yes, probably worth another thread. there's a lot to be said for raising kids in nyc, but at your strata, you'll most likely want to consider private schools.

No they just shoot up the schools in Jersey, and Pennsylvania, and Ohio . . .

The chances of dying in a terrorist attack are so small that they don't even register statistically. Lightning and Shark attacks are higher on the list -- so I guess that knocks out the leafy Princeton and the Jersey shore as well . . .

Irrational fears overcompensate for real danger, and unfortunately people fall for it. Car Wrecks, Suicide, Illegal handguns, Childhood Obesity . . . that is what people should really be afraid of for their kids.

More kids will die from having their dorito eating fat asses riding in a gas guzzling SUV to school every day then walking to a subway and taking it to class. Not even close.

markz. I remember being served in McHale's when I was 13 -- i shit you not. of course i was with my dad, but i was going to dorian's by 16 and clubbing shortly after that. do you remember the tunnel club? there's some scary shit for kids in this town. true, its in the burbs too. there's pros and cons to both city and burb life.

I love McHales and I couldnt be happier to have a beer with my son there and then take a ride home after a burger on the Subway (unfortunately McHales is gone).

To me, that is the essence of urban life. I much prefer a more Euro way of living where my kids are integrated more into adult life earlier as opposed to a "sneak and drink" situation. I am sure you have spent time in Dublin or Nice or Barcelona and seen the same.

Again -- its my way of thinking, being a suburban kid and seeing trouble there as well.

Problems are everywhere -- my point is that no "environment" is the cure, and no environment is the problem, either.

Where you live is not the problem. Idle hands are the devil's tools.

Contrary to markz's assertion, some people outside of his over-55-no-kids-no-job demographic do get a lot of use out of a NYC pied a terre. Four years ago, I was 36 with a husband and two kids, living in a NJ McMansion. Our family spent one night a week plus one weekend a month in our NYC place. (My husband and I are both employed.)

We sold the NJ house six months ago and made NYC our home. We considered simply flipping the situation -- move to NYC and keep the house as our weekend retreat -- but we were paying absurdly high property taxes for a school system we wouldn't be using. If we want a weekend place, we can do better.

We gave up 7000 sq ft on close to an acre to move into 1600 sq ft.. I was sure we'd miss the home theater, the gameroom basement, and the yard. I was wrong. (Okay, I do miss having a hot tub. I'd gladly pay to install one in a neighbor's yard for weekly visiting privs in the winter. And we need to find a new weekly poker game.) The kids go to public school here -- they were in private school in NJ -- in classrooms twice the size, and walk to school in the rain and snow (uphill, both ways, just like when we were kids).

Just this morning my youngest said he never wants to go back to our old house. He loves it here.

The rest of my family couldn't agree more. If for nothing else, it was worth giving up more than 75% of square footage just to get out of the car culture. I only wish we'd done it sooner.

I've been hearing that more families are staying in the city once they have kids instead of leaving for the burbs because the reasons why people used to leave are not as much an issue today. The city is more livable, safer, cleaner schools are getting better. But again, it's a lifestyle choice. You do get more space in the burbs so it depends on your preference.