[FreedomPoster]

Barnes bought a house in 1999. She was surprised that Irwin Mortgage, which her builder recommended, approved a $103,000 mortgage with her then-income of about $25,000.
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The reason: "They basically are telling me I don't have enough income to maintain the mortgage," said Barnes, who said she now earns $4,000 a year more than when she bought the house.

Anyone who believe they can afford a loan, the size of the one the mortgage company will give you, is incredibly naive. This is a prescription for being house-poor at best, or foreclosed-up/bankrupt at worst.

Our first house, 20 years ago, was $20k less than her mortgage, and we were both working and making about what she was, each.

[FreedomPoster]

/foreclosed-up/foreclosed-upon/

[I still care]

I think standard rule of thumb is don't get into a mortgage more than twice your income.

That first roof you need to put on is a killer, also windows, and air if you are in the South. Also termites and plumbing problems. When you figure in taxes and insurance, home ownership can be far more than many people realize.

They just see their rent, but I figured it out and it took me 6 years in my current house to break even than if I had just paid rent, and now I need a roof.

[HungarianGypsy]

$103,000 for $25,000 a year? My husband makes twice that and we only got up to $110,000. At least we know we'll be able to afford it.

[pointsal]

This article is hogwash. When the smoke clears, some knucklehead (read attorney) will decide the person responsible for this mess is the hapless appraiser. But, the quick-thinking mortgage company has already abandoned the appraiser and adopted a computerized "automated valuation model" (AVM) to speed-up the process of generating new mortgages and sales for the contractor/builder. Plain old GREED is at the root of this- po'folks without enough cash-flow and mortgage brokers scamming the financial markets!