I can’t even begin to count the ways that this proposal is so… so… stupid! A Massachusetts politician wants to offer college graduates a subsidy to stay in Massachusetts for five years.
State Senator Brian A. Joyce, a Milton Democrat, this month filed legislation that would provide any graduate of a Bay State college $10,000 for a down payment on a house or condo. Joyce hopes the payment would soften the blow from the high cost of living and might persuade some graduates to stay and raise families here.
First, is the typical college graduate even thinking about buying a house or condo upon graduation? The median single-family home price in 2005 in a typical Boston suburb like Salem was $345,000. A condo was $271,000. Using a simple mortgage calculator, the monthly payment for a 30-year fixed-rate mortgage (5.75%) on that $345,000 house with a $10,000 payment would be about $2,000. For the condo it would be about $1,500.
According to accepted mortgage-lending standards, the debt-to-income ratio says that in order to afford a $2,000 per month mortgage, the buyer needs to have an income of $85,714. That’s just for the mortgage; taking into account all other bills, the rest of your monthly debt obligation (car payment, student loans, food, clothing, etc.) can exceed no more than an additional $571 per month.
Corruption, pandering, hackery
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