When applying for a home loan, one of the factors lenders consider is the percent of the borrower’s income used for housing expenses, as well as the borrower’s other non-housing related debt. Although this amount can vary by lender, typically lenders consider a housing-and-debt to income ratio of less than 40 percent as ideal.
Back in the 1970s and 1980s, a far more conservative housing-and debt to income ratio of 25% to 29% was considered normal.
These days, I believe we've seen the wisdom in keeping cost of housing as low as possible. Please don't get over-extended. In a falling or stagnant economy, it's not worth the risk!
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