If you were planning on winning the lottery and buying yourself a totally elaborate multi-million dollar mansion… all I can say is I'm sorry. (In full disclosure, I did win... $2.) But the time you spent swimming through listings and the feelings you felt for that perfect mansion don't have to go to waste, right? Is it really so far-fetched that you could one day afford to live there?
Most likely, 100 percent yes... But who am I to say what a human with a goal in mind can and cannot accomplish? In the spirit of fun, I thought it would be fun to find out how much you would need to climb up the corporate ladder (or innovate the next Post-It Note) to be able to have a salary to afford the most expensive home in every state. (Spoiler alert: It's a lot) And the best part? Along the way we will get to look at some pretty snazzy real estate.
But first a lesson in luxury real estate: The people who are actually buying these homes are usually more likely to pay upfront with all-cash than go the financing route. According to a 2017 article by the Los Angeles Times, 35 percent of homes on the Los Angeles market priced at $2 million or higher were bought with all cash.
So for the other 65 percent who don't have that much in the bank, it's a mix of cash and financing—and if a mortgage is good enough for Beyoncé, it's good enough for me! So, for this fun exercise, let's get a mortgage using a 20 percent down payment (because that seems reasonable, right?). However, since conforming loans max out at $453,100, in most places, you're going to need a jumbo loan—a loan that the government doesn't secure and usually comes with higher interest rates and stricter application requirements. So, using a jumbo mortgage calculator (with a 20 percent down payment and current jumbo mortgage rates of 4.750 percent), here's a rough estimate of how much you would need to earn yearly to make the monthly payments on a 30-year, fixed-rate mortgage (based on the guideline that 28 percent of your pre-tax monthly income should go to your mortgage).
Though the monthly payments on these houses look more like yearly salaries than the amount you'd put on a rent check, there are some surprises. Most places require a salary of between $1 and $6 million, but in Alaska, Iowa, Nebraska, and South Dakota, you don't even need to break seven figures to buy. However there are a few places, like California and Colorado, where the monthly payment is awfully close to half a million dollars , meaning you'd need to make around $30M a year (~Can you believe?~).
from Apartment Therapy | Saving the world, one room at a time https://ift.tt/2PUiHE5
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