Determining How Much House You Can Afford

Overspending on a house was a major contributor to the real estate bubble and its subsequent collapse. To minimize the potential for future problems and the threat of foreclosures, make sure you accurately project your costs and income to determine how much mortgage you can afford.

Overspending and losing a house to foreclosure can impact the wealthy as well.

Below, one of our new contributors Lynne Ashminov shares some thoughts on what to keep in mind when determining how much you can afford. The bottom line: be honest about your finances and don't use any government-like budget tricks to make the budget fits the house.