400k is not affordable with nothing down on 90k gross with four people to feed and put into vehicles. 3x income is a ceiling of loan affordability and that is a stretch for the early years. 270k loan and they should have made it work, they paid twice that and are suprised that it didn’t work out. I can’t believe they didn’t realize the taxes would be raised based on the purchase price. On 90k gross their take home is about 4-5k a month after health insurance, minimal 401k, etc. And their interest only payment for two years would be 3800/mo. before it resets. Even if they didn’t have the new tax rate it was 3200, how do you buy a house where you can’t afford the temporary teaser rate. When I made 90k gross I bought a house for 200k and money was tight for a few years.
These stories are becoming so common and every person in this situation has friends, relatives and co-workers that know their story, what is that going to to do the buyer psyche even when prices get in line with rent. Joe six pack isn’t going to understand the details and why it happened they will just equate R/E with financial ruin.
