It's crazy how much people over leverage themselves these days. It's pretty bad how the real estate system takes advantage of them too. They get them pre-approved for this crazy amount and people think they are good to spend the whole wad. Then they end up in trouble. I went in with a monthly payment I knew I was comfortable making last time we bought a house and I worked within that scope.
I didn't discuss too much about down payment. I paid 20% down when I bought my first house. All these calculation assumes that you are putting 20% down payment. How many people in Caclifornia can afford a 20% down payment for a $1M home? Very few.
I think that is the case all over the place. That's why you see people getting suckered into these high interest balloon loans and stuff like that. It's pretty crazy! I don't think we did a full 20% down on this house. We had to be pretty close though. With the equity we built here, we should be able to on our next one I hope.