Do you spend more than 2陆 times your salary on a house?

I was reading Bankrate.com and came across an advice John Sestina made. I'm a little confused and hope this can be cleared up.

This was copy and past from http://www.bankrate.com/brm/news/mtg/200...

"Sestina, a fee-only financial planner and president of John E. Sestina & Co. in Columbus, Ohio, offers this rule of thumb: Don't buy a house that costs more than 2陆 times your salary. That's your current salary, not what you think it will be someday."

Is Mr. Sestina stating on the mortgage loan taken out or the total cost of home? If this helps, my wife and I make $140,000 yearly. We're looking to buy a house for $405,000 with 20% down payment. We have student loan debt of $600.00 a month,which falls off in 5 years.

So base on his comment, ($140,000x 2.5=350,000). In our situation, we shouldn't take a loan out for more than $350,000 or we shouldn't purchase a house more than $350,000?

Edit****

Thanks for the comment/advices so far. If one of us stops working, then yes we'll have issues making payments(but that can happen with any families).

The loan I would actually take out is $324,000. Our payments will be around $2500 a month and 3100 with income/debt. If our take home pay is $6875.89, we still have $3775 to use on utlties,entertainment, etc etc. What do you guys think?

i think that the advice is sound and I also do think that the bank will lend you the money for a $405 house based on your income.
especially since you have five more years to pay the $600 a month.

with your student loans included your debt to income ratio would be too high for you to afford the $405K house.

the above poster is correct that you would be pretty close to the edge since you will need a car for the both of you plus car insurance homeowners dues, taxes on the house etc
That would be a really tight squeeze!

I would not touch that house with a 100 foot pole

all this is saying is don't get a lone that is more than you would make in 2 and 1/2 years and don't assume that you will make money off of it. Report It

you shouldn't do either because your financies will be over extended and if something happens to your combine income and lowers it you will be in trouble on the fact that you cannot repay the loan or the mortgage.

i was tought that ur monthly housing payments ( rent or mortage ) should be less then a 1/4 of ur monthly income and u never take ballon payments or variable rates

Not sure where u live bit 400k sounds high for this market

Well if you make that kind of money you can afford a nice house but what if one of you were to get sick and couldn't work anymore? Or, what if one of you decided you wanted a divorce? My relative is stuck with a huge house payment because his wife walked out. He has a nice three bedroom house and makes a good living but has a hard time with a huge morgage payment plus taxes and upkeep. It's up to you but it's a serious investment especially with the economy slow down and so many foreclosures. Have you thought of buying a house that has been foreclosed and fixing it up? I've heard you can get some pretty good deals? If I was in better health and my credit better I'd look into that myself.