re: House = (x)household income

quote:

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When yall talk (x)hh income are yall talking about amount of loan or total home cost?

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Initially I meant value of home, with the assumption of a 20% down payment. People moving up in home seem to shop for what they can afford to put 20% down on....or at least I do.

With that assumption, a single individual making 100k buys a 400k house, but borrows 320k. The 30yr note on 320k is reasonable, but when you step back and see the house is worth 4x his/her income, it seems a bit much. The down payment hugely influences the equation, which is why I assumed 20% to keep it simple. A trust fund baby putting down 250k on a 500 house is excluded from this discussion, ha.

I just thought it interesting to see what others thought was comfortable.