Quote:
Originally Posted by scfr
For example, if you have 2 households with similar incomes and total debt as percentage of income, but one household has only 1/2 the savings as the other house and saves a much smaller percentage of their income, wouldn't it make sense that they ought to own a much less expensive house?
|
Yes, but the existing rules of thumb already account for that by designating that no more than a certain percentage of income should go to overall debt servicing (I think it is 36% but I'm not positive). So the family with limited debt can spend more on a home and the family with more debt should spend less. Plus the family with more savings can afford a larger downpayment.
__________________
Steve
Join the 2009 Ebay Challenge!
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.