OK, so who remembers: should the price of a house be twice the yearly income or 1,5 times the yearly income? What’s the rule?
We are looking at a house in an area that was developed to commemorate the Civil War and all streets are named accordingly.
House Prices
Clarissa's Blog 
The maximum mortgage they will let you take is 3x the annual income.
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The metric I’ve heard is that monthly fixed housing costs (mortgage + property tax + insurance) should be no more than 1/3 monthly income.
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I’ve heard the 30% of income rule, too (and I believe that new underwriting rules also require a certain overall debt-to-income ratio; googling that phrase would probably prove helpful).
If you haven’t discovered them already, nicole and maggie (nicoleandmaggie.wordpress.com) are good sources of advice on all things financial (and will point to other good sources). Try the “mortgage” or “money” tags (from the tag cloud in the righthand column).
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Twice or one and a half times annual income depends upon interest rates. When interest rates on 30 year fixed rate mortgages are low, as they are now, 2x is OK. When they go higher, the multiple drops. People are more fortunate nowadays. When I first bought a house in 1972, the lenders would not consider the wife’s income at all.
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I gave these away to friends one year before the most recent US housing bubble burst:
http://www.fridgedoor.com/mrhobu.html
“Take a bath in the real estate market with Mr. Housing Bubble.”
“Free balloon mortgage inside!”
“If I pop you’re screwed!”
“Not affiliated with Mr. Internet Bubble.”
Might as well wait until the commercial real estate bubble bursts …
Why settle for a house when you can have your own drive-in warehouse?
I’m also waiting for those multi-storey carpark conversions — from upwardly aspirant carpark to chavvy caravan estates in less than one generation!
I always wanted to be a slum lord! 🙂
As for all of the shopping centres and indoor malls …
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Hilarious!!! Thank you!
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