[fireforeffect]

1. 100 x monthly rent = cost of the house
2. 2.5-3.0 x yearly gross income = cost of the house
3. 40% (MAX) monthly take home pay should equal cost of monthly carrying costs of the house (PI, taxes, utilities, upkeep)

Used these when I bought, weirded out my search realtor.

Never have had trouble making a payment.

[org.whodat]

2. 2.5-3.0 x yearly gross income = cost of the house

That was the rule of thumb for lenders for many, many years, and if they had followed it, this bubble would never had happened. Actually a 2.7 with a twenty year mortgage will save a buyer tons of money.

[ItisaReligionofPeace]

#1 seems very much more conservative when compared to #2 and #3.