How Much House Can You Afford?

by The Happy Rock on March 30, 2008

hummer-pink-suv.jpgOr maybe how large a car payment can I handle?

Every were you turn online calculators and salesman are always telling us the maximum we can spend on any given purchase.

It’s the wrong question!

So you can afford a $200,000 house that has the extra big yard that, but it is 50% of your take home pay. Or maybe you can afford the next size SUV that gets 15 – 18 miles per gallon for a mere $450 a month. What the salesman and free online calculator from a site that is is trying to lend you money forgot to mention is that we are being set up for financial failure. What there aren’t telling us is that the payment is probably more money than we can handle. What they forget to mention is what happens when the dual income family loses one of the incomes or some extra medical bills roll in.

It’s the wrong question, but what are the right questions?