Monday, April 22, 2013

Should you use a home equity loan or a home equity line of credit?

At some point, you’ll probably think about renovating your home to accommodate, let’s say, the new addition to your family. But the problem is, you don’t have the money to pay for the renovation. As a homeowner, you may want to consider getting either a home equity loan or a home equity line of credit (HELOC).

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A home equity loan and a home equity line of credit (HELOC) are loan options commonly described as second mortgages secured against the equity of the same property. As second mortgages, they’re used to fund major expenses such as home improvement, education, and medical care. The specific difference between the two loan types is that home equity loan borrowers will receive a one-time cash lump sum to finance their needs while HELOC borrowers are allowed to withdraw money up to a credit limit pre-approved by the lender.

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Home equity loans have a fixed interest rate and fixed term. Usually, borrowers are given 10 to 15 years until the entire loan has been paid up. In HELOC, there’s an adjustable interest rate and borrowers can choose when and how often to withdraw money. HELOC works like a revolving credit loan, which is why it’s trickier than the lump sum loan.

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Both Home equity loans and HELOC use your home as a collateral, which means that you could lose one of your most valuable assets in case you fail to pay the loan. In this sense, you may want to ask yourself, “Is home remodelling worth the money?”

Tap into the power of your home’s equity with Network Capital Funding. Visit this website to learn how to apply for a home equity loan.

Tuesday, March 26, 2013

Inc 5000 list: Companies with at least 500 percent three-year growth rate

Last year, Unified Payments was the best performing privately held company based on the 2012 Inc. 5000 list. This list is a useful platform to gauge the revenue-generating capacity of all private companies in the United States. Rankings are based on the companies’ growth rates over a three-year period, and their revenue in the initial year should not go below $200,000. Subsidiaries or divisions of a much larger company are not eligible for ranking, only US-based, privately held, and independent business entities.

While they are not as successful as the top three contenders, the following companies have also shown highly remarkable growth rates, with each achieving at least a 500 percent increase.

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Impact Makers - 1,030 percent

A management and health care IT consultancy, this company operates as a competitive social venture. Despite having no shareholders, the company donates a good portion of its profits to local healthcare-related charities.

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Dhaliwal Laboratories - 743 percent

This company serves as a contract manufacturer and private labeler of cosmetic products and over-the-counter drug preparations. It develops, tests, and blends a variety of personal care products, including liquid soaps, deodorants, lip balms, acetone-based items, and analgesics.

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Network Capital Funding Corporation - 557 percent

Headquartered in Irvine, California, this company provides fixed-rate, adjustable-rate, and jumbo mortgages, home equity loans, and FHA and VA loans to homeowners and home buyers throughout the United States. It boasts of loan specialists who have at least eight years of mortgage banking experience.

This link provides more ideas on how to succeed in business ventures, retain a large customer base, and maintain robust revenue generation.

Thursday, February 28, 2013

There's no such thing as getting "pre-approved" for a mortgage

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Applying for a mortgage is a long process. Even before filling out the paperwork, the applicant must already have the correct “background” for the loan: a consistently high credit score, a satisfactory income at a long-term job, and a continuing ability to pay amortization– regardless of circumstance– for the duration of the mortgage. Some lenders require several background checks and interviews before approving an application. This long and tedious process sometimes causes applicants to jump at the first chance to cut the line.

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Buyers are sometimes approached by agents or banks claiming that they have been “pre-approved” for a mortgage. Without giving too much information as to how that happened, they imply that part of the initial paperwork and hassle will be bypassed; the scenario usually ends with the buyer submitting an application on the spot.

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Although a preliminary approval does exist, it is merely a means for the seller to see that the buyer has the means to pay for the property. It is by no means a guarantee that the buyer has “passed” the background check or is approved for a mortgage. If anything, being pre-approved for a mortgage simply means that buyers have been assigned to a mortgage rep or agent. In fact, it does not move them any further along the process. They are subject to all the same steps, and along the same timeline, as if they had applied for the mortgage themselves.

Applying for a mortgage has its own house of booby traps. Let Network Capital Funding Corporation help you in processing your loan. Read more about the company on this website.

Monday, February 25, 2013

Fix what's broken and earn along the way

In light of the financial difficulties posed by the last decade’s economic crisis, the Federal Housing Administration’s (FHA) 203(k) program aims to help individuals repair and renovate homes and acquire income in the process.

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With the 203(k) program, an individual can fix his or her house and charge the costs to mortgage payable over 30 years. This applies to renovating single-family homes or multifamily structures with up to four units. The total loan amount is taken from the property’s appraised value, together with the repair costs. Borrowers are required to make a down payment of only 3.5 percent of the loan.

The loan does more than just help individuals fix their homes. It may also allow them to profit from the repair. By buying a property for a low price and choosing fairly inexpensive but high-quality renovation, a borrower has the chance to incur a sizable equity.

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However, there is one catch. The borrower must live in the building up for repair. Experts on the loan stated that borrowers typically buy a run-down multifamily house, repair it, and then live in it for a year. They then refinance the loan to turn it into a conventional loan, then move on to another house. Most borrowers do this because of the 203(k) program’s interest rate, which is higher than most conventional loans at 3.75 to 4 percent. Additionally, borrowers have to hire a consultant who will determine whether the repairs done on the house comply with the government’s health and safety standards—which can incur additional expenses.

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As the famous quote from Lucille Ball goes, luck is “realizing what is opportunity and what isn’t.” To an individual with the right know-how, the 203(k) program not only helps build a home, it also opens many windows of financial opportunities.

Network Capital Funding offers many types of loans which borrowers can choose from. The firm’s team of experts helps clients determine the type of loan that works best for them. This website offers more information about the company and its products.

Monday, February 11, 2013

Homebuilders: Barely in the clear

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Although recent reports on the real estate market show U.S. home builder confidence at a six-year high, it may be too early to say the housing industry is back in full force. The country had seen steady gain in the housing demand since its record low in 2005, but experts at Forbes seem to think the industry still has a few challenges to overcome before analysts can say that the sector has recovered.

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Even with how Congress averted maxing out the national debt, the new “fiscal cliff deal,” or Taxpayer Relief Tax Act, provides a negligible leeway for credit seekers. Loan and mortgage applicants may only qualify if they managed to maintain exceptionally high credit scores– a chore that proved increasingly difficult during the economic recession. Those who do qualify for a mortgage could still be presented with undesirably high interest rates, which discourage borrowing or any purchasing activity in the real estate sector at all.

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In observing the trends, it is easy to note that real estate prices are rising faster than they’re getting sold. This is a familiar sign of another “burst” in the real estate “bubble,” such as was first seen in 2007. The symptoms are at risk of moving from residential real estate to commercial and corporate properties. Companies like Network Capital Funding have recently announced embarking on an extensive office redesign. While infrastructure improvements raise real estate value, the industry is not predictable enough to determine if the cost of construction will reward returns when the property is sold.

Read more about real estate news and trends on this Facebook page.

Thursday, January 31, 2013

REPOST: New rules aim to make mortgages safer

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Author: Les Christie

Reposted from:

This article reports on the new mortgage rules which encourage borrowers to know exactly what they are getting into in order to avoid mortgage mess. 

Federal officials unveiled new mortgage rules on Thursday meant to reduce risky lending and make it easier for borrowers to know exactly what they are getting into.

The aim of one rule is to keep lenders from issuing loans to borrowers who can't afford to pay them off.

"When consumers sit down at the closing table, they shouldn't be set up to fail with mortgages they can't afford," said Richard Cordray, director of the Consumer Financial Protection Bureau.

The rules are meant to avoid the kind of mortgage mess that spawned the financial crisis and ultimately led to the Great Recession.

During the housing bubble, many lenders had lax underwriting standards. Banks often didn't check documentation, didn't require minimum credit scores and didn't determine whether borrowers had income enough to keep up payments.

Now, when a loan meets new lending criteria outlined by the CFPB, it becomes a "qualified mortgage," which will give protection for the banks from lawsuits filed by aggrieved borrowers or buyers of mortgage-backed bonds.

"It's a set of standards that protects consumers from bad loans but it also protects lenders from lawsuits," said Davis Stevens, CEO of the Mortgage Bankers Association. "Lenders are not protected if they go outside the guidelines."

The new rules will eventually change the process homebuyers go through in obtaining mortgages. Here's what you need to know.

Which lenders do the rules cover? All companies that give out mortgages will be governed by the new rules -- big national banks, savings and loans, community banks and credit unions.

"The rules will encompass most of the market as it exists today," said William Emerson, president of QuickenLoans.

How is a "qualified mortgage" defined? The rules spell out what is called a qualified mortgage. To judge whether a loan is qualified, lenders must consider these factors:

  • Income and assets must be sufficient to repay the loan;
  • Borrowers must document their jobs;
  • Credit scores must meet minimum standards;
  • Monthly payments must be affordable;
  • Borrowers must be able to afford other debts associated with the property such as home equity loans;
  • Borrowers must be able to afford all home-related expenses such as property taxes; and 
  • Lenders must consider a borrower's other obligations like student loans, car loans and credit cards.

What if a borrower doesn't meet all those guidelines? A homebuyer could still get a mortgage, but only if the mortgage payments don't exceed 43% of the borrower's pre-tax income.

What other requirements are there? When judging ability to repay, lenders can't use payments based on interest-only loans or so-called negative-amortization rates, in which mortgage balances grow over time.

They also can't use teaser rates, which adjust higher after a set term. Loan terms cannot exceed 30 years, and up-front fees, such as points paid to reduce interest rates, must not be excessive.

To be clear: The rules don't prohibit those unconventional types of loans. But lenders, in deciding whether to give out such a loan, must judge a borrower's ability to repay as if the loan were a conventional loan.

When will the rules go into effect? The rules start to kick in by January 21, but lenders will have 12 months to fully implement them.

What about jumbo loans? The ability -to-repay rule covers even the large, so-called jumbo loans, which are not backed by any government agencies such as Fannie Mae or Freddie Mac. But Stevens of the mortgage bankers group said he still expects jumbo lenders to follow the qualified mortgage guidelines. That will give them legal protection.

Are there any exceptions? People with subprime adjustable-rate mortgages or other risky loans who are refinancing can do so without going through the full underwriting process required by the new rules.

The CFPB is also proposing that mortgages issued by certain non-profits for low-income homebuyers be exempt from the rules. The agency also wants to make exceptions for some refinacings made through the Home Affordable Modification Program and for some loans issued by small community lenders. These proposals, if approved, will be finalized this spring.

Network Capital Funding helps clients make informed decisions on their property investments. This website gives more information on finding the home loan that matches one's specific needs.

Tuesday, January 22, 2013

REPOST: What Is Middle Class in Manhattan?

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Author: Amy O’Leary

Reposted from:

In this article, the author discusses the social, political, and economic forces that continue to shape middle class living in Manhattan.

DRIVE through almost any neighborhood around the country, and class divisions are as clear as the gate around one community or the grittiness of another. From the footprint of the house to the gleam on the car in the driveway, it is not hard to guess the economic status of the people who live there.

Even the landscape is carved up by class. From 15,000 feet up, you can stare down at subdivisions and tract houses, and America’s class lines will stare right back up at you.

Manhattan, however, is not like most places. Its 1.6 million residents hide in a forest of tall buildings, and even the city’s elite take the subway. Sure, there are obvious brand-name buildings and tony ZIP codes where the price of entry clearly demands a certain amount of wealth, but middle-class neighborhoods do not really exist in Manhattan — probably the only place in the United States where a $5.5 million condo with a teak closet and mother-of-pearl wall tile shares a block with a public housing project.

In TriBeCa, Karen Azeez feels squeezed. A fund-raising consultant, Ms. Azeez has lived in the city for more than 20 years. Her husband, a retired police sergeant, bought their one-bedroom apartment in the low $200,000 range in 1997.

“When we got here, I didn’t feel so out of place, I didn’t have this awareness of being middle class,” she said. But in the last 5 or 10 years an array of high-rises brought “uberwealthy” neighbors, she said, the kind of people who discuss winter trips to St. Barts at the dog run, and buy $700 Moncler ski jackets for their children.

Even the local restaurants give Ms. Azeez the sense that she is now living as an economic minority in her own neighborhood.

“There’s McDonald’s, Mexican and Nobu,” she said, and nothing in between.

In a city like New York, where everything is superlative, who exactly is middle class? What kind of salary are we talking about? Where does a middle-class person live? And could the relentless rise in real estate prices push the middle class to extinction?

“A lot of people are hanging on by the skin of their teeth,” said Cheryl King, an acting coach who lives and works in a combined apartment and performance space that she rents out for screenings, video shoots and workshops to help offset her own high rent.

“My niece just bought a home in Atlanta for $85,000,” she said. “I almost spend that on rent and utilities in a year. To them, making $250,000 a year is wealthy. To us, it’s maybe the upper edge of middle class.”

“It’s horrifying,” she added.

Her horror, of course, is Manhattan’s high cost of living, which has for decades shocked transplants from Kansas and elsewhere, and threatened natives with the specter of an economic apocalypse that will empty the city of all but a few hardy plutocrats.

And yet the middle class stubbornly hangs on, trading economic pain for the emotional gain of hot restaurants, the High Line and the feeling of being in the center of everything. The price tag for life’s basic necessities — everything from milk to haircuts to Lipitor to electricity, and especially housing — is more than twice the national average.

“It’s overwhelmingly housing — that’s the big distortion relative to other places,” said Frank Braconi, the chief economist in the New York City comptroller’s office. “Virtually everything costs more, but not to the degree that housing does.”

The average Manhattan apartment, at $3,973 a month, costs almost $2,800 more than the average rental nationwide. The average sale price of a home in Manhattan last year was $1.46 million, according to a recent Douglas Elliman report, while the average sale price for a new home in the United States was just under $230,000. The middle class makes up a smaller proportion of the population in New York than elsewhere in the nation. New Yorkers also live in a notably unequal place. Household incomes in Manhattan are about as evenly distributed as they are in Bolivia or Sierra Leone — the wealthiest fifth of Manhattanites make 40 times more than the lowest fifth, according to 2010 census data.

Ask people around the country, “Are you middle class?” and the answer is likely to be yes. But ask the same question in Manhattan, and people often pause in confusion, unsure exactly what you mean.

There is no single, formal definition of class status in this country. Statisticians and demographers all use slightly different methods to divvy up the great American whole into quintiles and median ranges. Complicating things, most people like to think of themselves as middle class. It feels good, after all, and more egalitarian than proclaiming yourself to be rich or poor. A $70,000 annual income is middle class for a family of four, according to the median response in a recent Pew Research Center survey, and yet people at a wide range of income levels, including those making less than $30,000 and more than $100,000 a year, said they, too, belonged to the middle.

“You could still go into a bar in Manhattan and virtually everyone will tell you they’re middle class,” said Daniel J. Walkowitz, an urban historian at New York University. “Housing has always been one of the ways the middle class has defined itself, by the ability to own your own home. But in New York, you didn’t have to own.”

There is no stigma, he said, to renting a place you can afford only because it is rent-regulated; such a situation is even considered enviable.

Without the clear badge of middle-class membership — a home mortgage — it is hard to say where a person fits on the class continuum. So let’s consider the definition of “middle class” through five different lenses.

The Money You Make

We’ll start with an obvious marker: If the money you live on is coming from any kind of investment or dividend, you are probably not middle class, according to Mr. Braconi.

If you live in Manhattan and you are making more than $790,000 a year, then congratulations, you are the 1 percent.

Most researchers define the middle class by calculating the median income for a place, and grouping people into certain percentages above or below the absolute middle.

By one measure, in cities like Houston or Phoenix — places considered by statisticians to be more typical of average United States incomes than New York — a solidly middle-class life can be had for wages that fall between $33,000 and $100,000 a year.

By the same formula — measuring by who sits in the middle of the income spectrum — Manhattan’s middle class exists somewhere between $45,000 and $134,000.

But if you are defining middle class by lifestyle, to accommodate the cost of living in Manhattan, that salary would have to fall between $80,000 and $235,000. This means someone making $70,000 a year in other parts of the country would need to make $166,000 in Manhattan to enjoy the same purchasing power.

Using the rule of thumb that buyers should expect to spend two and a half times their annual salary on a home purchase, the properties in Manhattan that could be said to be middle class would run between $200,000 and $588,000.

On the low end, the pickings are slim. The least expensive properties are mostly uptown, in neighborhoods like Yorkville, Washington Heights and Inwood. The most pleasing options in this range, however, are one-bedroom apartments not designed for children or families.

It is not surprising, then, that a family of four with an annual income of $68,700 or less qualifies to apply for the New York City Housing Authority’s public housing.

What You Do

“There’s no room for the earlier version of the middle class,” Mr. Walkowitz said. Firefighter, police officer, teacher and manufacturing worker all used to be professions that could lift a family into its ranks. But those kinds of jobs have long left people unable to keep up with soaring real estate prices.

A police officer with five years’ experience in New York makes about $69,000 a year. A teacher with the same number of years in the city’s public school system makes between $50,812 and $63,534.

The shift toward a knowledge-based and service economy has created a new set of middle-class jobs, like graphic designer, publishing professional and health care administrator. Positions that would nudge a family into the upper class elsewhere — say, vice president or director of strategy — and professions like psychologist are solidly middle class in Manhattan.

The same holds true for jobs in higher education, a growth sector for the city.

The average tenured university professor at New York University or Columbia makes more than $180,000 a year, according to a 2012 survey by The Chronicle of Higher Education. Sweetening the deal for those looking to buy, N.Y.U. has offered mortgage assistance and discounted loans, while qualified Columbia faculty are eligible for a subsidy of up to $40,000 a year. Some faculty members benefit from university housing that rents well below the market rate, in prime locations on the Upper West Side and in Greenwich Village.

Maya Tolstoy, an associate professor at Columbia and a marine geophysicist who studies seafloor earthquakes, lives with her 9-year-old son in a small two-bedroom apartment in a doorman building on Riverside Drive. Because her building is owned by Columbia, her rent, about $1,800 a month, is manageable on an associate professor’s salary, which averages about $125,000. A similar market-rate apartment on the Upper West Side costs about $6,000 a month, according to a monthly report compiled by MNS, a brokerage firm.

“I think it’s much tougher for people with my income to survive in Manhattan without subsidized housing,” she said. “I am very lucky to have it.”

Are Children the Last Straw?

One way to stay in Manhattan as a member of the middle class is to be in a relationship. Couples can split the cost of a one-bedroom apartment, along with utilities and takeout meals. But adding small roommates, especially the kind that do not contribute to rent, creates perhaps the single greatest obstacle to staying in the city.

Only 17 percent of Manhattan households have children, according to census data. That is almost half the national average, making little ones the ultimate deal-breaker for otherwise die-hard middle-class Manhattanites.

Not only do children strain the wallet as that one-bedroom becomes infeasible, but many middle-class families have little confidence in public education. Tuition fees at private schools can reach $40,000 a year. So families decamp to the suburbs or hope that their offspring will test well enough to get into the public school system’s gifted-and-talented program, which offers a more challenging education free of charge.

“The trauma of kindergarten I still have not forgotten,” said Ms. Tolstoy, who beyond hitting a jackpot of sorts with subsidized Columbia housing, struck gold again when her son was accepted into a gifted-and-talented program.

But to get her son that far, she found it necessary to hire a consultant, costing about $800 for two sessions.

When Did You Get Here?

More than 280,000 units — nearly half of Manhattan’s apartment stock — is rent-regulated in some fashion. These apartments are either godsends to those who occupy them, or daggers that twist in the hearts of everyone else, left to pay market rate or compete for the borough’s remaining vacancies — 2.8 percent of the housing stock, as measured in 2011. But 30 percent of the residents of rent-stabilized apartments moved in more than 20 years ago.

An intriguing definition of what helps a person gain entry to the Manhattan middle class was ventured by Jonathan Bowles, the executive director of the Center for an Urban Future, who issued an in-depth report in 2009 that examined the city’s changing class dynamics. “Understanding who is middle class, in New York, but especially Manhattan, is all about when you got into the real estate market,” he said. “If you bought an apartment prior to 2000, or have long been in a rent-stabilized apartment, you could probably be a teacher in Manhattan and be solidly middle class. But if you bought or started renting in a market-rate apartment over the last 5 or 10 years, you could probably be a management consultant and barely have any savings.”

Sabrina Dent was born and raised in Manhattan thinking she was middle class. Ms. Dent grew up attending a private school on the Upper East Side. She did not realize what normal life was until she left Manhattan to attend a public university in Rhode Island, where she paid less in rent than her father had been paying for a 12-by-6-foot parking space in the city.

“That radically readjusted my barometer,” she said. Now Ms. Dent is a Web designer in Cork, Ireland, living a regular middle-class life, and unable to imagine why anyone would want to stick it out in Manhattan on a moderate income.

“The only artists I know now who are still in Manhattan,” she said, “either made it big and bought, or are still in the rent-controlled studios they landed in 1976, and will leave in a coffin.”

Values That Define You

People define class as much by association and culture as they do by raw numbers — a sense, more than anything, of baseline financial security garnished by an occasional luxury like a vacation, and a belief that things can get better through hard work and determination.

“Middle class, to me, is having a pretty good job, enough money to pay bills and rent, and then a little extra,” said Desiree Gaitan, 29, a manager of social media for Shairporter, a tech start-up that arranges shared taxi rides to New York airports. She says she feels middle class even though she makes about $40,000 a year (equivalent to about $17,900 a year in a more typical part of the country).

Ms. Gaitan stays afloat by shopping at thrift stores, picking up baby-sitting gigs when she can, and hanging onto a great deal: she pays $600 a month to share a rent-regulated two-bedroom apartment near Columbus Circle — a place her roommate’s parents found years ago.

“It’s tough,” she said. “I have a good work ethic, and I think I would like to stay as long as possible, as long as I’m enjoying my career. All of that is worth it at the end of the day, for some psychotic reason.”

Are They Dying Out?

“Manhattan has serious affordability problems,” said Mr. Braconi, the economist. In the last decade, the percentage of people who are paying “unaffordable rents” (defined as more than 30 percent of their income) has increased significantly, according to a report issued in September by the city’s comptroller.

If that trend continues, it will feed the perennial panic that Manhattan’s middle class is on the brink of extinction, no longer able to cope with the city’s prices and fast retreating to its natural habitat, the suburbs.

It is true that the middle class here is smaller than anywhere else in the country. It is true that price pressures from both real estate and the cost of living are not slowing down anytime soon. But it is also true that calamity has been forecast for over a century now.

“Soon, there will be no New Yorkers,” proclaimed the Sunday magazine of The New York Times in 1907, in an article that detailed how families making $1,000 to $3,000 a year — $24,000 to $72,000 a year in today’s dollars — were being pushed out because of increasing rents, and servants’ wages, as well as the crushing cost of ice and coal. Adjusted for inflation, laundry alone for a family cost $115 a week. A pound of chicken? $8.08. Rent, on the other hand, for a “small, middle-class flat in a decent, but unfashionable locality,” would seem to be a bargain in today’s market, at the price of $272 per room per month.

In 1968, New York magazine documented the mad scramble for affordable apartments in a cover article detailing the extreme lengths to which average people went to secure one. “Surgeons have postponed operations, housewives have gone back to work, hippies have cut their hair and families have destroyed their pets,” the magazine reported. “Little hope is held out for the middle-income ($15-20,000 a year) people, career girls who do not want roommates and couples with more than one drawer-sized infant.” Brownstones that had sold for $125,000 in 1958, according to the article, were selling 10 years later for twice that much (in today’s dollars, a jump from $827,000 to $1.65 million).

Reports of the middle class’s demise also appeared in 1978, 1998, 2006 and 2009, when The New York Observer chimed in with “City to Middle Class: Just Not That Into You.”

But members of the middle class remain, scattered among the elite and the growing numbers of the working poor, in that place where lucky deals and tiny kitchens converge, wondering, just as they did in 1910 and 1968, how long they’ll be able to stay put.

Ms. Azeez in TriBeCa is pondering the question. The only young people she sees moving in around her are often buoyed by parental support, given an apartment at graduation the way she was given a Seiko watch. As her own friends and neighbors age or die out, she wonders, “who is going to take our place?”

Network Capital Funding helps clients find the right type of home loan that's suited for their situation. More information about home lending are available on