Safe as... houses?

[wingsrising]

I was browsing through the Color of Money chat on Washington Post LIVE. I do this a lot. Not sure why since Michelle Singletary generally annoys me.

So, this was one of the questions:

New Jersey: I am a single woman, early 30s, contemplating buying a home. I have no debt, save regularly, and make a decent salary in the 60's range. Generally, I

Comments

[cifarelli]

You might be able to go higher than $150k, but I don't think I'd go above $200k, and $300-$350 sounds awfully high to me. The house we're building now is hitting $250k on the nose, and that was absolutely the highest we wanted to go. And our takehome is around $90k give or take a little. Admittedly there are two of us and we have a kid, so that changes things a bit, but I'd be REALLY uncomfortable spending $300k on a house with a $60k salary.

Rule of thumb I've heard is not to go above 3x your annual salary.

[wingsrising]

Oh, I agree totally. I still plan to aim for $150k-ish. We'll see what's out there in that range -- much as I hate to miss out on the $8k from the government, I was still thinking about starting to look next spring.

It's not like I need a huge house, since it's just me and the cats and all!

It was just WEIRD to see someone in basically my financial position contemplating spending twice as much as I'm contemplating for a house -- and seeing Singletary, who's really into debt-is-evil and is even against student loans, endorsing it.

Safe as... houses?

[mmaestro]

I think the straight up financial calculation isn't as helpful as you might think: savings (both for downpayment and an emergency fund after, as well as furnishing the place) and your ability to do repairs yourself (or pay someone else) should pay a far larger part in the calculation than they usually do, IMO. People often seem to assume everyone has about the same level of DIY competence, but they don't (we're inept and have to find money to pay someone else to do everything, a major expense).