Alysha’s monthly income is $1,500. She is currently renting an apartment for $750 a month. She wants to buy a house. The mortgage would be $1,350 a month. Analyze her decision and state why such a financial decision is responsible or irresponsible.(1 point)

Question

Responses

Alysha’s decision is irresponsible. Her home may depreciate in value after she buys it.
Alysha’s decision is irresponsible. Her home may depreciate in value after she buys it.

Alysha’s decision is responsible. Owning a home will stabilize her finances when she no longer has to pay rent.
Alysha’s decision is responsible. Owning a home will stabilize her finances when she no longer has to pay rent.

Alysha’s decision is irresponsible. She should only buy a home if she can pay cash for it.
Alysha’s decision is irresponsible. She should only buy a home if she can pay cash for it.

Alysha’s decision is irresponsible. With a mortgage payment taking up 90% of her income, she will likely have difficulty making payments.
Alysha’s decision is irresponsible. With a mortgage payment taking up 90% of her income, she will likely have difficulty making payments.

Answer 1

Alysha’s decision is irresponsible. With a mortgage payment taking up 90% of her income, she will likely have difficulty making payments.

This response is the most accurate because spending such a large percentage of her monthly income on housing would leave her with very little room for other necessary expenses, savings, or unexpected costs. Financial experts generally recommend that no more than 28-30% of income be spent on housing to maintain a healthy budget. In Alysha's case, a mortgage payment of $1,350 would significantly stress her finances, likely leading to financial strain or default on her mortgage payments.