Comment on Ok, boomer
greyfox@lemmy.world 1 day agoI think they worded that backwards and are referring to the adage (or maybe that is what the banks go off of?) that your loan shouldn’t be for more than 3x your income. So if you make 80k per year you can generally afford a $240k house.
Going above that 3x means too much of your income goes to paying for the house and you don’t have enough for other living expenses+maintaining the house.
SparroHawc@lemmy.zip 1 day ago
Now good luck finding a home for only $240K in an area that actually has decent-paying jobs…
aow@sh.itjust.works 1 day ago
Just as a real example, 70-80k/year is very feasible in the Philadelphia area. I saved up around 90k across a decade (with a worse income…) and bought a place for slightly over 350k. The thing is you NEED that initial down payment amount to make those numbers work, PMI with less than a conventionally mortgage down payment is a debt trap. Most people aren’t financially literate, and people with large amounts of capital take advantage of that in the lending and real estate industries.
If you can settle or pool resources this all gets easier, and if you have disabilities or make poor financial decisions it becomes impossible and you rent trap yourself. Renting still makes more sense for people with jobs that move around, though.