"True or false: Never buy a home that costs more than 2.5 times your annual income."
I knew they would consider the answer false, as it's become a somewhat outdated rule of thumb. Interest rates are lower than they used to be when this was widely used. But I answered "True" anyway. Here was the response:
Your answer A. True is incorrect.
The right answer is B. False
Good luck even finding such a house in many major cities. Instead of the price, what counts is your monthly payment. And that's affected by your down payment and the terms of your loan.
I didn't add the emphasis. They bolded, "what counts is your monthly payment."
Seriously, isn't that how we got into this mess?