Should I pay $1865 for rent in NOHO?

Question

I am comtemplating on renting an apt for $1865 per month. The current special is $99 deposit and $64 move in. I want to buy a house this year but I would have spent $22,000 in rent.

This is kind of a decision based on me living with friends and just trying to hurry and get my own. I can handle the rent but what shall I do.? I currently live with my boyfriend and don't have to pay rent. He sometimes says he needs space.

But He lives in a run down place with roaches and wants to move some place better what shall i do?

On top of it I have friend from japan and parents pay their rent and a single female friend who have low income rent where an agency like mental health pay theirs and they say they would not pay that kind of money.

So-called friends ask can I afford it? I guess because I stayed with them a few days and asked for assistance from them. I guess some people think if you ask them for help then i'm not doing well.

I have paid $975 per month on my own before.

Answer 1

Renting sounds good, but try and find something in your price range so you are not "strapped? week to week and having no money for "fun", food, etc.

If you want to buy, this is what lenders look at:

Take your income (before taxes), multiply by 43 percent for FHA/VA, multiply by 45 percent for conforming, and 50 percent for subprime. Take that amount, and subtract your monthly payments for auto, credit cards etc. Anything that is on your credit report and you are paying a monthly payment on. Now take the bottom figure (and that is what you can afford) Lenders like to see your DTI (debit to income ration) between these ratios. Sub-prime can be higher, but the 50 percent is a good estimate. You also have to take into consideration the property taxes and homeowners insurance on the property into the DTI ratio.

What are you paying now? What are you confortablt with.?

When you Decide to buy, decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok - Just depends on your credit. You could get a lower interest rate or it could be higher - it is all based on credit. It is up the Lender what they offer you. That is why you need to use a mortgage broker.

Why? Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) FHA/VA approved too. If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home &/or refinancing, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.

By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only - not the final - but it does help you figure things out

Cost associated with your loan. You will need to pay for the appraisal up front (when it being done). You will need to pay for The Home Owners Insurance Coverage for 1 YEAR . The seller can help you with up to 6 percent of closing cost. So the title fee, lender fees, underwriting fees, flood cert, etc can be paid for by the seller. If the loan amount is high, than you do not need 6 percent (ok) but if you live where the home values are 60,000 - 100,000 than the 6 percent comes in handy so you have no out of pocket expenses, except for the appraisal (and sometimes the seller will pay for it, depends on how generious they are).

YOU CAN ALSO DO A FOR SALE BY OWNER - YOUR MORTGAGE BROKER WILL HELP YOU & THE SELLER FROM START TO FINISH, TO CLOSE YOUR LOAN. THE PERSON YOU ARE WORKING WITH, WILL ORDER TITLE, ANY SURVEY’S NEEDED, INSPECTIONS IF NEEDED, ORDER PAYOFFS ON SUBJECT PROPERTY IF THERE IS A MORTGAGE ON THE PROPERTY.

100,000 @ 6 rate 30 yr fixed = 599.55 P/I
150,000 @ 6 rate 30 yr fixed = 899.33 P/I
200,000 @ 6 rate 30 yr fixes = 1199.10 P/I

100,000 @ 7 rate 30 yr fixed = 665.30 P/I
150,000 @ 7 rate 30 yr fixed = 997.95 P/I
200,000 @ 7 rate 30 yr fixed = 1330.60 P/I

These are just estimates (ok) Like I mentioned it is all based on credit. There are also interest only, pay options where you pick a payment between 4 payment options) You have arms, I/O programs, where your payment is interest only for 30 years, or set for 5 years, than the paymeent switches the a fixed rate, 10 yr I/O, just depends on what you are looking for.

Answer 2

Have you prepared a monthly budget? Is it written down? Can you refer to it often. If the answers are yes. Then only you know if you have the income to comfortably afford this rent.

It is double your prior rent, so that is a leap. Has your income gone up double since those days? If the answer is yes and you haven't also doubled your expenses in other areas, then it appears that you could well afford it. Should you toss in the toiddy so much money when you want to buy a house. Heck no!!
But what can you do, keep with roachy bf digs?
Look long and hard at your overall annual plan and see if this is really the best move for you.

Best of luck

Answer 3

If you are serious about getting your own place soon, you will not move into this place. Move in with your friends or stay were you are for now. pay your friends a good rent, Say $700, and save the remaining 1200 for a down payment on your place. This builds your relationship with your friend by helping them save money and will save tons of money and headaches in the future. Paying 22000 dollars for rent will not pay off for you in the future. 1865 is about the amount you will be paying on a 300k house why give that to someone you don't know for a year, and walk away with nothing.

Answer 4

Well, you didn't tell us enough about the apt. Is it a studio? a one bedroom? Are there doormen? Are you just renting a room in the apt, or the whole apt.

I would say that 1800 to 2500 would be around the right price for a studio in a nice building. It would be a cheap one bedroom in a nice building. If the building, and street, aren't so nice, well that tends to cut against seeing this as a good price. If you are only renting a room in an apartment (ie sharing an apt) and would be paying 1800, then that is a rip off.

I live in a studio in a doorman building circa Columbus Circle, for like $20 less. I love my apt. and it is relatively cheap compared to my friends.

Whether you can afford it? No one knows that but you. My personal rule is that rent shouldn't exceed one half of your after tax monthly income.

Answer 5

$1865 to rent an apartment!?!?! I would never pay over $1000. A mortgage could cost this much and would be better in the long run. Pay $975 a month instead, unless you could afford this. This sounds too expensive to me.

Answer 6

If she moves in utility bills will go up so she should not only pay 1/3, but you should get a 'discount' on your portion of rent for having to share the place with an additional person. (She should have to pay wherever she lives, no more 50-50 with your cousin if he moves in his gf)

Answer 7

I say no. Try Craigslist, lots of ads have pics so you can scope out the place before wasting your time and gas.

Answer 8

If you want to buy a house and have a free place to stay-stay where you are at.NoHo sounds fab and all-but save your money