IYM Article: David Bach and Mortgage Math
When I hear folks talk about buying "as much house as they can qualify for" because that's what their agent / broker / financial advisor told them was a smart move, I feel like throwing heavy office implements across the room.
What you can qualify for, and what you can afford, are two very different things. And folks had better learn the difference, because today's most popular financial gurus apparently don't.
Edit: The issue of what exactly constitutes a "housing expense" in the FHA guidelines is an intriguing one. Looking to shed some light on the topic, I found a HUD Affordability Calculator. Since that's coming "straight from the horse's mouth," as they say, I feel pretty confident with my calculations in the article. It appears as if "housing expense" is taken to mean PITI (principal, interest, taxes, and insurance), and that's what I used in the article.