How much of a mortgage can I afford?
Here's how to figure out how much you can afford:
Use any of the plethora of mortgage calculators out there, plug in how much you can afford to spend out of your take-home pay now, what interest rate you expect (4.5% is a decent estimate for someone with good credit these days), and how long you want to be paying the mortgage (10 years? 15 years? 30 years?).
Some other variables to consider:
- down payment - you want to pay at least 20% down to avoid adding PMI to your monthly payment
- taxes and insurance - these will be added to your monthly payment as well
- dues/other fees that will be required
- What other fixed debt payments do you have (student loans, credit cards, cars, etc.)
The monthly payment on a 4.5% mortgage over 30 years (which is a long time) on $640k (80% of $800k) is $3,243, which will be VERY hard to do on a $100k income, especially after adding taxes, insurance, and other fees.
A more realistic goal would be to keep your payment at 25% of your take-home pay, which would be about $1,700, which would be a mortgage of about $330K,
which would be a $425K condo after a ~20% down payment of $90k.
Note that the fact you are in NYC is largely irrelevant. The mortgage payment would be the same on an $800K condo in lower Manhattan as a $800K ranch in rural Montana. Just because that's what the prices are doesn't mean that you can magically afford it on a $100K salary.
If I were you, I would find a way to make this more affordable:
- Find a cheaper place to live
- Find a roommate to rent to (don't share the mortgage or ownership - keep everything in your name and put everything in writing)
- Wait, in order to save for a larger down payment and for a larger income.
Your other questions will need to be answered by the bank or broker that gets you the loan, but the more irregular your earnings are, the more risky you will be considered, which may disqualify you for the loan or raise your interest rate.