What can I afford?
Lenders used to work off the rule of “28/38″ — you could put 28% of your gross income into housing payments, as long as you didn’t put more than 38% of your total income into debt payments (think house+car+credit cards).It’s gotten a little Wild West-y in the past few years, and honestly, Citibank has been willing to let me spend half my income on mortgage payments.
For comfort though, I’d recommend 35%.
For those of you who like to crunch your own numbers, here’s a worksheet from an independent government site.
Hey! I crunched the numbers and that still sucks