{"id":17919,"date":"2011-11-28T10:15:50","date_gmt":"2011-11-28T18:15:50","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=17919"},"modified":"2011-11-28T10:15:50","modified_gmt":"2011-11-28T18:15:50","slug":"what-does-affordable-mean-to-you","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2011\/11\/28\/what-does-affordable-mean-to-you\/","title":{"rendered":"What Does “Affordable” Mean to You?"},"content":{"rendered":"

Good comment from Jonness<\/a> on this week’s poll:<\/p>\n

Personally, I would not feel comfortable leveraging into a $360K loan on a $100K income at a time where a significant risk of price declines exists. But, apparently many people have no problem with this. From what I\u2019ve read, many people actually consider 28% of gross annual household income to be a conservative amount.<\/p>\n

My question is, how do other Seattle Bubble posters feel about the 28% affordability measure? Is this realistic as an affordability measure?<\/p><\/blockquote>\n

\"Confused<\/a>
Because what article isn’t improved by a generic stock photo? (credit: s_falkow<\/a>)<\/div>\n

I’ve always heard it as 30% of gross annual income, which is the number I used for my Simple Affordability Calculator<\/a>, and the number I use when calculating the Affordability Index<\/a>.<\/p>\n

On the other hand, my personal opinion is that families that take out a mortgage whose payments eat up 30% of the gross of two incomes are putting themselves in a precarious position should either breadwinner lose their job or even take a pay cut.<\/p>\n

My family’s threshold is quite a bit more conservative than the “traditional” measure of affordability. When we bought our house this year, we kept our total<\/em> monthly payments (PITI<\/a>) at around 15% of gross income—half of what is traditionally considered “affordable” by most. We also only counted one income, and have no other debt whatsoever.<\/p>\n

So what does “affordable” mean to you? Would you take out a mortgage that required 30% of your gross income to make the payments, or is your threshold 20% or even lower?<\/p>\n","protected":false},"excerpt":{"rendered":"

Good comment from Jonness on this week’s poll: Personally, I would not feel comfortable leveraging into a $360K loan on a $100K income at a time where a significant risk of price declines exists. But, apparently many people have no problem with this. 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