6/24    What are some rule of the thumb in buying a house? Some say you can
        live comfortably if you buy a house that is 3-4X your salary, and if
        you have 20% down for it. What about other rules? Are there good
        books to get on this?
        \_ I heard that loan companies usually approve a loan whose monthly
           payment is up to 1/3 of your pre-tax monthly salary.
        \_ In the Bay Area, you have to throw those rules out the window.
           You can get a mortgage for up to 50% of your gross income, if
           you have good credit. What kind of payment you think you can
           afford is up to you. -ausman
        \_ As the above says, this is the BA so it's all different.  I know
           more than 1 person who have 105% loans (negative 5% down).  All
           sorts of whacky stuff goes on here.  Since there are numerous
           evil loan agents and especially real estate agents who will try
           to oversell you a home, keep in mind the following: You *must*
           actually *READ* every single tiny bit of paper someone puts in
           front of you *BEFORE* you sign it.  *ASK* what something means if
           you don't *FULLY* understand it.  Do *not* get yourself into some
           whacky loan situation where you're going way outside the historical
           norm of 20% and 1/3rd max income.  You *can* get all sorts of weird
           things but there's a reason for the 20% down & 1/3rd income figures.
           These are numbers calculated to make sure you can make your payment
           and still have money for food, etc, for the average person.  One
           whacky thing you *DO* want in the BA is a split loan.  Instead of
           getting a jumbo loan (over $300k or so these days), get yourself
           a lower interest standard loan on the first $300k and a higher rate
           loan on the rest and then *PAY OFF THE HIGHER RATE LOAN FAST*!
           Your monthly out-go with a split will be about the same but all
           money you put into early payments on that higher loan will *really*
           benefit your future bottom line.  Do the math.  It's amazing how
           much you save over the life of your loan(s) doing this stuff.
           \_ If you make more money, you can probably afford a higher
              percent of your income toward your mortgage, but that depends
              on your spending habits. Think about it, if you make 30k/yr and
              33% is house payment, you are left with 20k/yr to live on, but
              if you make 90k/yr and 50% is house payment, you still have
              45k/yr to live on. This is simplified, but the truth is, you
              can probably afford more than the 28-31% usually suggested,
              but you will have to forgo the nice car and the vacations
              overseas. It is all a matter of what is important to you.
              \_ Yes, this is all true and I agree 100%.  What I left out of
                 my long thing about split loans, etc, was the shakey job
                 market and economy in general.  As a matter of pure personal
                 preference and choice I like being able to go on those nice
                 vacations.  I also like knowing I can afford to be out of a
                 job for 18 months without worrying about my mortgage or
                 dramatically changing my lifestyle.  With BA salaries, you
                 can go *much* higher than the 1/3rd rule and _probably_ be
                 ok.  But bad things happen.  Enjoy the best but be prepared
                 for the worst.  Balance in everything.  IMHO a house is only
                 just so nice and can add only just so much to your life to
                 increase your happiness.  Nice vacations, better cars, and a
                 growing bank account improve mine with a nice but not super
                 duper fantastic house.  I suggest not being a slave to one's
                 mortgage.  Being happy is more important than being miserable
                 in a bigger house.  This is all very personal and will vary
                 greatly by individuals.  Others might be much happier with a
                 nicer house and lower-quality vacations, cars, cash, etc.