The best situation would be to have a mortgage that is no more than 2.5 times your income. This is tough in today's market, but it will prevent your being house poor as time goes on. Also, with equity in the house you will save paying mortgage insurance and weather the ups and downs of the market with peace of mind. You can go to bankrate.com and play with the calculators on there to see how much the payments would be. I usually include additional money in my payment for insurance and property taxes so I don't have to come up with large sums for those things. The total of these payments should not be much more than 50% of your income.
What you can afford and what you can qualfy for are totally different factors and many of today's defaults are due to decades of "alt a" loans. Person making $20,000 might qualify for $75,000, but the monthly payments will be almost double the monthly percentage of 25% they can reasonably afford. Rather than buying a house, try to find a home you can afford.
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