Taxes are high on this one, but in most places you're going to pay a lot of taxes on a 900k house.
You are on the money with 3x income being what you can realistically spend on a house without getting yourself in trouble.
A later poster says this is a mistake because it's what banks use, not what you can afford, but the banks historically used that number because it is what a person can reasonably afford. Way back when banks actually had to eat a loss on a bad loan, they knew who to loan to.
That amount of money would pay the mortgage (and nothing else) on a 30-year loan on a $900,000 house in the place where he lives, given a 20% down payment:
http://www.zillow.com/homedetails/2012-Coralbells-Ct-Longmon...
It wouldn't pay for anything else. He's just giving it as an example of what that amount of money can buy.
http://www.zillow.com/homedetails/101-Far-Brook-Dr-Short-Hil...
Taxes are high on this one, but in most places you're going to pay a lot of taxes on a 900k house.
You are on the money with 3x income being what you can realistically spend on a house without getting yourself in trouble.
A later poster says this is a mistake because it's what banks use, not what you can afford, but the banks historically used that number because it is what a person can reasonably afford. Way back when banks actually had to eat a loss on a bad loan, they knew who to loan to.