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02-10-2013, 10:45 AM
Old Navy Goat
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Join Date: Apr 2003
Location: Sin City Philippines
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Originally Posted by vcv View Post
I have a financial question.

My wife's sister is looking at houses and we all got talking about what you can or should spend. I always figured you shouldn't spend much more than twice your current yearly gross income on a loan. All the online calculators I've checked seem to indicate waaaay more.

Very tempting to look at upgrading though, that's for sure

Most will tell you that you shouldn't spend more than 50% of your net on a mortgage payment. They will lend a higher amount but then you're in house debt and your quality of life suffers. She should also put in her criteria in regards to location, age etc as a different town will have a different tax ratio so she could get more, a newer house will have better insulation so the heating / cooling costs will be better and that can be quite significant.

I don't run the numbers like I used to since I have my Realtor take care of those hassles, but its take home pay to mortgage payment vice total income to price of house. So much breaks down to the loan rate as to how much you can afford.

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