re: Mortgage Amount 2-2.5x Annual Income

quote:

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Figure in property tax, homeowners insurance, medical ins., car ins., car loans, child care (if applicable), cell phones, cable, internet, etc and it gets tight in a hurry. $100k per year ain’t what it used to be.

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Everything depends on your individual situation/job but all of this shouldnt be costing you much more than $2k a month depending on the optional "child care"/"Car loan" areas. For example I'll do mine and my wifes together:

property tax - $376/mo
homeowners - $122/mo
medical ins - ~$200/mo including dental/vision
car ins - ~$300/mo (the expensive kind, and for 3 vehicles)
car loans - we havent had one in 2 years
child care - $0 for now
cell phone bill - $113/mo
youtube tv - $65/mo
internet - $75/mo

So for us all this is about $1,250/mo. Combine that with a $1,232 mortgage that's still only about $2,500 a month and if a couple is making $6,500 a month that's still not really living tight at all. Throw in $1k for child care if you want, still not killing a couple with $6,500/mo income.

Just think you went a little overboard acting like someone who makes $100k/yr cant afford a $250k house. I mean sure they probably couldnt if they are saddling themselves with say $2k/mo of other debt (or have like 5 kids), but, they should be getting themselves out of that debt before getting into home ownership too. the fact is home cost has increased dramatically since the days of what you were talking about might have been possible. Again, homes just arent really $100k-$200k any more.

I guess you are just assuming people are really bad with money which i get but it doesnt mean they cant "Afford it", in situations like that they are likely just making poor financial decisions to not be able live in a $250k house on $100k income.