Buying a house in brooklyn

amother

Cerise

Sun, May 21 2017, 10:59 pm

I always thought I would never settle here but it looks like it may make sense to stay. Housing is insane though. I have 120k cash in savings and my parents will loan me 80k. I figure I can pinch and squeeze and afford a house for 800k. The monthly mortgage with all taxes and everything would be around 4k. Hopefully id find a tenenat for the basement to bring that down. We make a combined income of around 100k. Am I totally nuts to even dream of buying a house here. Also, how much are closing costs and what other hidden fees would I have. Assuming this house was in pretty decent shape structure wise but just needed kitxhen and bathroom updates and a paint and floor what is the leaat that would cost me. Lastly, what are average monthly utilies. I have three kids and the oldest 4.

amother

Khaki

Sun, May 21 2017, 11:22 pm

amother wrote:

4k * 12 months =48,000 in monthly mortgage & your combined income is 100K (is that after taxes?), so that is already almost half. I think it's too much of a percentage! What are you other monthly expenses?

Also, how much can you expect the basement to rent for? Be aware that some months may be empty & may need to do some fixing for tenant apartment & your own house. I don't want to discourage you - it's great to own a house, but think it through well & make sure you have a bit of a buffer/some way to cover unexpected things. Hatzlacha Rabba!

mummiedearest

Sun, May 21 2017, 11:42 pm

I'd wait and save. or just move to a cheaper area for a while and revisit the thought later. don't borrow in addition to a mortgage. if you can't afford it on your own, don't buy. houses always surprise you with hidden costs: repairs, etc. don't dig yourself in a hole you can't get out of.

amother

Goldenrod

Mon, May 22 2017, 7:22 am

familyfirst wrote:

Or consider fixing up the basement so that YOU can live there for a nice few years and renting out the house for more. That should help you cover more of your mortgage.

This is the only way to afford such a home on $100,000 income.
Also be aware that one needs to expect that there will be repairs on the home each year for about 10% of the value of the home ($8,000) that needs to be available in the family's annual budget.

amother

Puce

Mon, May 22 2017, 9:17 am

You also have to consider utilities like gas, electric, water, phones, internet service?? Those things alone can add an extra grand a month to your expenses, besides the mortagae. Does the house have Central Air or individual room units? Is there a lawn in front & backyard, that will need maintenance? All these will have to figure out into your monthly expenses. It is a lot to think about. Also, are you sure you can even legally rent a basement in Brooklyn?? I know people do it all the time, but I have heard people wait for a C/O and then fix up the basement to rent. Because no one is suppose to be living in the basement.
Brooklyn housing prices have skyrocketed. Good luck.

doctorima

Mon, May 22 2017, 10:19 am

amother wrote:

I assume you meant 1% of the value of the home, which is $8000. 10% would be $80,000, and the average home certainly doesn't need that much annual maintenance.

amother

Goldenrod

Mon, May 22 2017, 10:52 am

doctorima wrote:

I assume you meant 1% of the value of the home, which is $8000. 10% would be $80,000, and the average home certainly doesn't need that much annual maintenance.

Yes thanks for pointing out that typo.

amother

Seashell

Mon, May 22 2017, 11:16 am

amother wrote:

Depends on the size and condition of tge home, not the value. I spend 5% of my home value on repairs each year, but the house was cheap to begin with.

amother

Wine

Mon, May 22 2017, 11:19 am

I think banks look at something called "debt to income ratio". Basically they don't lend money that will cause your monthly payments on housing, cars, minimum credit card payments, and student loans to exceed 43% of your montly income. So if you make 100k (lets assume that's after taxes)that's around 8300 a month. The bank only wants the bills mentioned above to be around 3400 or so, because that's around 43% of your monthly income. It doesn't seem like your there. You would need a family member to be on the loan and include their monthly income as well. Hatslacha!

amother

Cerise

Mon, May 22 2017, 11:40 am

OP here. I do not have a car. I have zero credit card debt or student loan debt. I have perfect credit. The 100k that I said is after taxes. We pay very minimal health insurance because one of us has a good work plan. I know I will need a cosigner on the mortgage and that is not a problem. We both have jobs here so it really does not make sense to say to Passaic and commute because that will force us to buy cars and pay for more childcare etc so day to day living we are best off staying here but housing is an issue......The mortgage doesnt scare me so much but the extra costs piling up are...Also, what are closing costs on a house in Brooklyn. I really want to own a home because there are too many stories of the landlord selling the house and the tenant having to move and no where to go etc. Also, its a great asset to have.

amother

Brunette

Mon, May 22 2017, 11:51 am

So your take home is about $8300 per month. A $600,000 mortgage will run you about $2900 per month. Plus taxes and insurance, I'd guess at least another $1000 a month. Plus utilities. So you're close to half your income on the house. Can you live, including all household expenses and tuition, on about $4000 a month?

amother

Linen

Mon, May 22 2017, 12:14 pm

I wouldn't do it. home ownership is expensive. Even if you have tenants, there's no guarantee that the apartment won't end up being vacant and having tenants can be a huge headache. I don't live in brooklyn so I don't know if its legal. if its not then definitely don't do it.

amother

Jade

Mon, May 22 2017, 12:19 pm

asmileaday wrote:

The bigger question is where are you finding a house with a rentable basement for 800k?

My brother got one for 730k. It's not that impossible. But you will need to put in work to make a place rentable.

Regarding closing, it helps a lot if you have a relative in the business who can keep costs down. Still, you can expect it to be 2-5% of the cost of the house.

amother

Cerulean

Wed, May 24 2017, 3:32 am

amother wrote:

A $600000 mortgage is a jumbo loan - banks are very hesitant to give those. An older house will cost a lot to maintain, heat and cool.
$100k a year, with kids is not gonna cut it.

amother

Firebrick

Wed, May 24 2017, 12:35 pm

if you live in the basement and rent the top why cant she do it? also many many people live in basements that are not legal in brooklyn. apartments get eaten up before you know it you will have a tenant if you decide to go upstairs. and owners dont need to give a lot to get a tenant in brooklyn because its such high demand. you need to do your math. and figure it out.

I have been a owner in brooklyn and seriously you can get a tenant before you blink an eye. people are searching for apartments. the houses that are that cheap is probably old and needs a lot of repairs. I sold a house that was almost a 100yrs old. I had tons of people that wanted to buy it. I sold it for more then a million. and the new owner made two not legal apartments out of the basement and has now three tenants to and he lives in the main floor. he also had a cosigner. couldnt afford it on his own. gets ssi. so that helps too. but seriously you need to look around and see whats availbale. all houses have expenses like others mentioned.

many people have not legal basements and have tenants there.