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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Micawber who wrote (10870)	5/31/2003 9:18:53 AM
From: Les H	Read Replies (3) \| Respond to of 306849

I've read that 20 percent of the new homes are sold with downpayment grants from the builder funnelled through the "charities". They jack up the price of all the homes in the development by several percent and allocate the funds from the excess to fund the 3 to 5 percent downpayments and closing costs for the otherwise non-qualifiers. I've seen ads for $ 30,000 downpayment grants so $ 600,000 is certainly possible. Other ads have been for homes up to $ 1,000,0000.

To: Micawber who wrote (10870)	5/31/2003 10:30:19 AM
From: fatty	Read Replies (4) \| Respond to of 306849

>With a household income of $150,000, some money in the bank, and mortgage rates around five percent, you could rather easily qualify for and service the debt on a $600,000 house. Why is this such a mystery? Well, once you do the math, you will see that $150k isn't enough to afford a $600k house. Lets say you have enough savings so that you only need to borrow $500k, this translates to $3000 in monthly mortgage at the current rates. Property taxes, insurance, maintenance and utilities will add $1000 per month. The mortgage interest brings $500 tax benefits per month. So you total housing cost is $3500 per month. A $150k income brings home about $6000 after taxes and deductions. So you are left with $2500 to cover foods, clothing, entertainment, vacation, transportation, education, child care and all other expenses for a family of 3-4. This may sound a lot elsewhere, but it is pretty tight for Boston.