I remember my Mother, who was raised during the depression, saying to me before I bought my first house “never pay more than 25% of your gross income for personal housing expenses, add a little extra to each payment and… never ever re-finance (unless you can drop your rate 2 points and shorten the lenght)”. I used this formula when I purchased my last three residences.
I believe we will be getting back to this formula before the next rise in housing begins either by Federal regulation or, hopefully, people more conscious of their financial future.
Remember: As much as it hurts, listen to your Mother.
