Anonymous wrote:I moved the slider to the very lowest point of the "affordable" range, and it was still $250K more than we paid for our house.
We bought conservatively because we were sending our autistic child to a very expensive special needs school, but even backing that out, I don't think we could comfortably afford the $1.7M that they said was middling "affordable" for us.

The nerdwallet survey includes a question asking about your monthly obligations, including childcare. If you fill that portion out correctly it should account for those financial needs.

I moved the slider to the very lowest point of the "affordable" range, and it was still $250K more than we paid for our house.
We bought conservatively because we were sending our autistic child to a very expensive special needs school, but even backing that out, I don't think we could comfortably afford the $1.7M that they said was middling "affordable" for us.

This makes me happy! I thought we were stretching, but we’re right in the middle of the green zone. I guess I feel poor since a lot of our paycheck goes directly into brokerage accounts

Nerdwallet based it's suggestion on a debt to income ratio of 36%. This is pretty reasonable for most people. This is supposed to be the max you can afford without stretching.
You do not have to buy at the max of your affordability. If you want to save more, you can go with the lowest value in the range.
Our income is 170K. Nerdwallet shows a range between 460K - 1.4M and a suggested home value of 970K. We like to be a bit more conservative and prefer to be in the middle of the green range (700K).
Nerdwallets is right on target. I don't know why you find it comical.

It's a free tool just to get a ball park of an extreme. At the same time, the 3x rule is stupidly outdated. It was made in the 70s and 80s when interest rates were over 10%. The 3x rule doesn't apply when interest rates are lower. It also doesn't account for the fact that if you have a higher HHI, things don't scale linearly in terms of salary increases vs debt load.

It put us over a million, too. We paid $550k.

$1.3M on a $135k salary LOL. I bought a house for $287k.

It said that we could afford over 1.5 million on our $210k joint salaries. What the ever-loving???

HAHAHAHAHAHA! IT said we could afford a 1.5M home on our 250k HHI. Yeah, no. Maybe if our kids had paid for college in the bag and we already had retirement sorted out. I'll stick with my 600k house and invest the rest.

Anonymous wrote:I just put our inputs into Nerdwallet's How Much House Can You Afford? calculator and, well, that was hilarious.

If I actually spent the upper end of the green range on a house each month, I'd never retire and my children would be begging on the street for college tuition. But, uh, okay, whatever.

Consume the internet calculators with caution. These loan companies/banks love to convince you to take out the largest loan possible. Never forget that they get rich off the interest you pay.

Most people retire with less than 200k in savings and their children take out loans for college (which is not begging on the street). I bet you could spend the upper end of the green range and still be way ahead of that. Which is what the green range should mean. If you want to cover all of undergrad and grad school and retire with 5m+, then you have to cut someplace.

Nerdwallet was telling me I could buy a $1 million house on a household income of $165k. That doesn't make sense.

We bought six months ago - very happy with what we spent, knowing it was a stretch for us. I put our stats in the NerdWallet calculator, and it puts us right in the middle of the yellow. Sounds right to me!

Perhaps you're one of those super conservative DCUM real estate types who thinks people who make $200k a year can only afford a $400k house, but I agree with NerdWallet.

I have been using nerdwallet for a few years to keep track of accounts, but now I use personal capital. Their calculators always seem fantastical to me, like doubling any outcome in my favor.

I just took it for a spin and the upper end of the green was just $15k over what we actually ended up buying. So, it seems accurate for me. The red zone is truly madness, but I guess that's why it's the red zone.

I just put our inputs into Nerdwallet's How Much House Can You Afford? calculator and, well, that was hilarious.

If I actually spent the upper end of the green range on a house each month, I'd never retire and my children would be begging on the street for college tuition. But, uh, okay, whatever.

Consume the internet calculators with caution. These loan companies/banks love to convince you to take out the largest loan possible. Never forget that they get rich off the interest you pay.