So, assuming you’re cool with handing over your bank statements, previous loans, your mom’s social security number, past parking tickets, and your most recent STD test, now it comes down to...
Can you actually afford this?
Usually, the answer is “hell no.”
“The ‘debt to income’ should generally not exceed 25%,” says King-Brown. “This is based on the numbers once you close/own the subject property, so the debt portion factors one mortgage payment plus building maintenance fee plus other bank and auto loans relative to the individual’s gross income.”
Plainspeak: the actual cost of the mortgage that you hypothetically will have, plus the monthly maintenance, plus the basic housing cost should not be more than 25% of your total income. Breaking that down, let’s say the cost per month of the apartment is $4,300, which is $50,000 a year in annual cost. If you make just under $200,000 per year before taxes and other expenses, based on the carrying costs, once you actually close on that apartment, you would be at 25-26% of your income, so you would JUST meet the requirement.