Could I afford to buy a $100,000 apartment on a $45,000 wage? ?

Question

Hi there,

I am about to graduate and get a full time job.

I was wondering, I have already $15,000, and looking at a place that costs a little over $100,000. 1 bedroom apartment.

Is it wise to make this investment instead of renting?

How much would I need to borrow? And how much do I need as a deposit?

Is this a wise decision? Also, I don't have a credit rating, will this affect this purchase.

NOVICE! Thankyou for any help in advance :)

Answer 1

In this market, I'd buy it!

Answer 2

Lots of questions here.

I probably could afford a $85,000 mortgage with a $45,000 salary.  I don't know if you could, because I don't know what your spending habits are like.  

There's also the question of whether you could get favorable lending terms with no credit history and a down payment of less than 20%.

Last, whether it's a good purchase depends on where the property is, how the property's value has moved over the last 18 months, etc.

We need more data!

My short answer is that in your shoes, I would probably rent for a little while.

Answer 3

You are good for up to $125,000.  Welcome to the world of homeownership.

Answer 4

I agree that more info is needed, however-the short answer is probably that yes, you should be able to afford that if your figures are correct and you are not in other debt.  20% down is recommended, right now you are at 15% on a 100,000 purchase.  Are home prices in your area dropping as badly as they are in the rest of the country?  Some places are holding their value better than others, so consider how long you intend to be at that location.  Credit rating or lack thereof will probably affect your ability to get a loan.  You should consider looking into some of the first time homebuyer assistance programs that are out there, just be aware that some are ending soon with the mortgage crisis.  Renting might make more sense for a little longer so you can save up more of a down payment and build up your credit.