Home Affordability Calculator

Annual Income

Annual Home Insurance Premium

Monthly Property Taxes

Monthly Other Fixed Liabilities Other recurring monthly payments that show up on your credit report such as minimum required payments for student loans, credit card debt and auto loans.

Down Payment (%)

Maximum Debt to Income Ratio (%) Some co-op buildings will have more stringent Debt to Income Ratio requirements than banks.

Interest Rate (%)

Loan Term (Years)

Months Post Closing Liquidity Required Many cooperative buildings will require prospective buyers to have a minimum amount of post closing liquidity.

Maximum Purchase Price
Maximum Loan Size
Monthly Mortgage Payment (P&I)
Down Payment
Total Cash Needed
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Glossary

Annual Income

Annual income is typically defined as your pre-tax, ‘Adjusted Gross Income’ from the Form 1040 of your US Federal Income Tax Return. Your AGI will be reduced by any adjustments made on ‘Schedule 1: Additional Income and Adjustments to Income.’ Such adjustments include (but are not limited to) contributions to a SEP IRA, a HSA (Health Savings Account) deduction and the student loan interest deduction. Oddly enough, this means that contributing more to certain retirement plans may reduce your AGI and ultimately reduce the maximum loan size you can qualify for.

Monthly Property Taxes

Monthly property taxes are customarily listed on condo and single or multifamily property listings online. The input to this field is $0 for a co-op since co-op corporations pay property taxes directly to the municipality on behalf of all unit owners. Co-op owners make one single, monthly ‘co-op maintenance payment’ which essentially includes common charges and property taxes.

Monthly Other Fixed Liabilities

Monthly other fixed liabilities consists of other recurring monthly payments that show up on your credit report such as minimum required payments for student loans, credit card debt and auto loans.

Debt-to-Income Ratio

Your debt-to-income ratio is the percentage of your monthly gross income which goes towards housing expenses and other fixed liabilities. Housing expenses for a condo consist of your mortgage payment as well as property taxes and common charges. Housing expenses for a co-op consist of your mortgage payment as well as the monthly co-op maintenance payment. Other fixed monthly liabilities includes recurring payments for student loans, credit card debt and auto loans.

Post-Closing Liquidity

Post-closing liquidity is the amount of liquid assets a buyer is required to have after closing on a property and factoring in the down payment and buyer closing costs. Post-closing liquidity (also known as post close liquidity) forecasts how many months’ worth of apartment carrying costs you will have readily available in liquid assets after you close on your apartment. Most co-ops in NYC require 12 to 24 months’ worth of post-closing liquidity, and your typical lender will require at least 6 months of post-closing housing reserves.

Monthly Common Charges or Maintenance

Both condos and co-ops have an operating budget which is paid for collectively by all the owners through a monthly fee charged to each unit owner. This maintenance fee will usually be split proportionally and fairly among the condo owners and coop shareholders, typically dependent on the amount of square footage their apartment has and other factors such as floor and outdoor space.

Condo common charges are different from co-op maintenance charges in that property taxes are not included. Because condominium owners are holders of real property, they are taxed individually by the NYC Department of Finance. As a result, they receive a property tax bill by mail and pay directly or via their mortgage lender. Co-ops make property tax payments on behalf of the entire building, and this means individual co-op owners do not pay property taxes directly.

Down Payment

Most co-ops in NYC require a minimum down payment of 20%. However, the specific buyer financial requirements vary by co-op. Although condos are generally more expensive, co-ops are often times less affordable due to a combination of higher down payment requirements imposed by co-ops and the need to have 1 to 2 years of ‘post closing liquidity’ for co-op board approval.

Disclaimer: Hauseit’s Home Affordability Calculator provides estimates that are meant to be illustrative and used for reference purposes only.
Disclosure: Hauseit and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).
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