Income requirements are often 3-4x the actual rent, so if someone has a good financial grip (no debt, no car) as many in NYC do, they may be able to afford it but not technically qualify. This is a sure fire way to become house poor but if you’re smart about it you can make it happen
Remember that renting can be financially better, depending on circumstances.
Purchasing also throws some money away, interest, insurance, maintenance (which is more than people think), and actual purchase and sale fees to banks and realtors.
Often the recommendation is to only buy if you really think you’ll be in that house for at least 10 years, can put 20% down… and some other things I can’t recall of the top of my head.
Perhaps you’ve never rented before. Affording and “not qualifying” are very different things. Sometimes you make far more than enough money to rent but maybe you work in the wrong industry.
They ask for the stupidest things. They want 3x rent up front for first, last, security. They want you to have a full year of rent in your savings. Until laws were passed, a person in my town would have to drop $9000 on DAY 1 to rent a 2bd, 2bathroom.
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Income requirements are often 3-4x the actual rent, so if someone has a good financial grip (no debt, no car) as many in NYC do, they may be able to afford it but not technically qualify. This is a sure fire way to become house poor but if you’re smart about it you can make it happen
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Remember that renting can be financially better, depending on circumstances.
Purchasing also throws some money away, interest, insurance, maintenance (which is more than people think), and actual purchase and sale fees to banks and realtors.
Often the recommendation is to only buy if you really think you’ll be in that house for at least 10 years, can put 20% down… and some other things I can’t recall of the top of my head.
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They’re 40x the monthly rent.
If you want to rent a $2,500 apartment, you need $100k in income (gross, not net).
Yes, if you can skimp elsewhere, you can make it work with a smaller ratio. But it isn’t an insane rule of thumb for what you can afford.
They’re saying 3-4x on a monthly basis.
I’m just saying what it is, in NYC it’s 40x the monthly rent for annual gross income, 80x for guarantors.
3.3x the monthly rent. This is true pretty much everywhere in NYC.
It’s in their range but more precise, and they will care about annual income. They’ll ask to see tax returns often.
Perhaps you’ve never rented before. Affording and “not qualifying” are very different things. Sometimes you make far more than enough money to rent but maybe you work in the wrong industry.
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The stupid policies will come to your town and then you’ll understand.
Have you rented recently?
They ask for the stupidest things. They want 3x rent up front for first, last, security. They want you to have a full year of rent in your savings. Until laws were passed, a person in my town would have to drop $9000 on DAY 1 to rent a 2bd, 2bathroom.
“rental down payments can’t hurt you, they aren’t real”
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