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Home loan question CA, NY

Anonymous
Posted by Anonymous
  • 23 Replies
So.. In places with a huge COL like LA or NY, do people also have to have huge incomes to match? I don't understand how anyone gets approved for a mortgage.

Say a couple makes 100k/year, and they want a starter home which in those places can be like $700k. Do they have to have perfect credit and a huge amount of savings to get approved? Is it more difficult to get a mortgage in a high COL area?

Where I live now, an average home is about $250k. If we had perfect credit and 100k income we'd get approved in a snap.
Posted by Anonymous on Nov. 24, 2017 at 6:14 PM
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Not_A_Native
by Ruby Member on Nov. 24, 2017 at 6:35 PM

Yes, you need a pretty high income.  I know NYC is extremely high (my daughter pays $2400 a month for a tiny studio apartment in Brooklyn), but I'm more familiar with CA since i lived there for years, and know many people who do now.

Yes, you need a high income.  And you can probably count on a pretty big commute as well unless the income is REALLY high.  $700K in silicon valley, for instance, will only get you a small home with a commute.  2 income families are the rule not the exception.  You also need a pretty big savings account, as well as good credit.

Even OR (Portland) where my daughter and her boyfriend bought a house - they moved to a tiny town 40 miles from anything, and still paid $335K for a small 3 bedroom.

Anonymous
by Anonymous 1 - Original Poster on Nov. 24, 2017 at 7:05 PM
It's so crazy to me. How do normal people with average incomes survive? Do they end up with a 2 hour commmute?

Quoting Not_A_Native:

Yes, you need a pretty high income.  I know NYC is extremely high (my daughter pays $2400 a month for a tiny studio apartment in Brooklyn), but I'm more familiar with CA since i lived there for years, and know many people who do now.

Yes, you need a high income.  And you can probably count on a pretty big commute as well unless the income is REALLY high.  $700K in silicon valley, for instance, will only get you a small home with a commute.  2 income families are the rule not the exception.  You also need a pretty big savings account, as well as good credit.

Even OR (Portland) where my daughter and her boyfriend bought a house - they moved to a tiny town 40 miles from anything, and still paid $335K for a small 3 bedroom.

MonarchMom22
by Silver Member on Nov. 24, 2017 at 7:10 PM

Your income to mortgage ratio is the norm - approx. 2.5 times your gross income, so 100K means a $250,000 house would be in your range.

Homes in my area average $650,000 - $700,000.  You would need about $250,000 in gross income for a mortgage, depending on how large a down payment you can make.

Quoting Anonymous 1: It's so crazy to me. How do normal people with average incomes survive? Do they end up with a 2 hour commmute?
Quoting Not_A_Native:

Yes, you need a pretty high income.  I know NYC is extremely high (my daughter pays $2400 a month for a tiny studio apartment in Brooklyn), but I'm more familiar with CA since i lived there for years, and know many people who do now.

Yes, you need a high income.  And you can probably count on a pretty big commute as well unless the income is REALLY high.  $700K in silicon valley, for instance, will only get you a small home with a commute.  2 income families are the rule not the exception.  You also need a pretty big savings account, as well as good credit.

Even OR (Portland) where my daughter and her boyfriend bought a house - they moved to a tiny town 40 miles from anything, and still paid $335K for a small 3 bedroom.


Not_A_Native
by Ruby Member on Nov. 24, 2017 at 7:14 PM

Yeah, a lot of them do.

Quoting Anonymous 1: It's so crazy to me. How do normal people with average incomes survive? Do they end up with a 2 hour commmute?
Quoting Not_A_Native:

Yes, you need a pretty high income.  I know NYC is extremely high (my daughter pays $2400 a month for a tiny studio apartment in Brooklyn), but I'm more familiar with CA since i lived there for years, and know many people who do now.

Yes, you need a high income.  And you can probably count on a pretty big commute as well unless the income is REALLY high.  $700K in silicon valley, for instance, will only get you a small home with a commute.  2 income families are the rule not the exception.  You also need a pretty big savings account, as well as good credit.

Even OR (Portland) where my daughter and her boyfriend bought a house - they moved to a tiny town 40 miles from anything, and still paid $335K for a small 3 bedroom.


Anonymous
by Anonymous 2 on Nov. 24, 2017 at 7:16 PM
Dh makes around $115k and we're in Monterey California - we wouldn't even want to borrow the amount a decent house would cost here. I have no idea what we'd get approved for but this income is absolutely nothing spectacular for where we live. Our rent is $3500 (not worth it).
Reading.Rainbow
by Mad Martigan on Nov. 24, 2017 at 7:18 PM

Yes, you have to be able to prove that you can make the mortgage payments each month, and that it doesn't go over a certain percentage of your income. 


nanny1918
by Ruby Member on Nov. 24, 2017 at 7:27 PM
My son lives in NYC and pays $3,200 a month for rent.
I wonder if stays there how he will afford a home.
ShesSoUnusual
by Cat on Nov. 24, 2017 at 8:22 PM

Or live in rental homes, or apartments. We did both when we lived in California. 

Quoting Not_A_Native:

Yeah, a lot of them do.

Quoting Anonymous 1: It's so crazy to me. How do normal people with average incomes survive? Do they end up with a 2 hour commmute?
Quoting Not_A_Native:

Yes, you need a pretty high income.  I know NYC is extremely high (my daughter pays $2400 a month for a tiny studio apartment in Brooklyn), but I'm more familiar with CA since i lived there for years, and know many people who do now.

Yes, you need a high income.  And you can probably count on a pretty big commute as well unless the income is REALLY high.  $700K in silicon valley, for instance, will only get you a small home with a commute.  2 income families are the rule not the exception.  You also need a pretty big savings account, as well as good credit.

Even OR (Portland) where my daughter and her boyfriend bought a house - they moved to a tiny town 40 miles from anything, and still paid $335K for a small 3 bedroom.



JoGibson
by on Nov. 24, 2017 at 8:28 PM
1 mom liked this
In those areas, yes.

Are you handy with home improvements? Look for a foreclosure.

I flip houses, here in upstate (finger lakes region) of NY I just bought a train wreck of a foreclosure for $25k, it's officially on the market all fixed up next week for $85k. I put $10k of material into it and did the work myself.
Southernmom924
by Platinum Member on Nov. 24, 2017 at 8:32 PM

You live in the suburbs and get a home for about 350,000 is what you do.

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