Quote:
Originally Posted by Jenn
when my parents married they were able to build a decent home that cost one and a half times my fathers yearly salary. (remember only one income). Lets say you took that same percentage to modern day. You would have to make $100K a year to get $150,000 house.
.....just some food for thought....go ahead and think about that one for a few
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that was back in the day when mortgages were interest only and you had to pay a bullet payment at the end.
the introduction of the amortized loan, which forces people to pay down principal over time, and heretofore ridiculously low rates (as well as creative financing schemes), lenders now use three times cash flow (annual salary, as adjusted) as a rule of thumb.