Multiple Of Gross Earnings Rule

Definition of "Multiple of gross earnings rule"

Bob Arnold
  Realty Executives

A rule that the price of a house should not exceed about 2 to 2.5 times your family's gross annual earnings. Example : If annual gross income is $70,000, the highest price one could afford would be $140,000 (2*$70,000) to $175,000 (2.5*$70,000).

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