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Reply to "What is actually "conservative" for financing a home?"
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[quote=Anonymous]Spending 20-25% or less of your net take-home pay (after taxes and 401k) would be fairly conservative....online calculators often work out your highest possible front-end debt-to-income ratio, which is generally seen to be capped at 36% of gross (pre-tax) income for all debt. Assuming strong credit and a 20% down payment, lenders will lend an amount to you that would result in a monthly payment (principal, interest, taxes and insurance) of a maximum of 28% of gross income, though many would allow you to go closer to your front-end ratio just for housing if you didn't have much other debt. Working back from what passes with lenders gives you an idea of what conservative is....Many of the cautionary posters here are exceedingly conservative from a lending perspective, a.k.a. the DCUM Thrift Police who see it as their providential duty to counsel against another housing collapse ;-)[/quote]
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