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#86866 - 11/13/08 01:35 AM Re: What would you give up first? [Re: pdx rick]
Greger Offline


Carpal Tunnel

Registered: 11/24/06
Posts: 16033
Loc: Florida
 Quote:
Gregor is going to be fine - he has a terrific backup plan. ;\)


Rick has graciously offered me a position as Chef and Butler at his new estate. When I reach the end of my rope here I will spend my last pennies on a flight to the left coast.........
_________________________
Good coffee, good weed, and time on my hands...

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#86889 - 11/13/08 03:20 AM Re: What would you give up first? [Re: pdx rick]
stereoman Offline
Carpal Tunnel

Registered: 06/30/04
Posts: 15646
Loc: Asheville, NC
You got it made, Greger. And once you sell your won estate, you can afford that ticket, and might even have some money left over to pay off your creditors.

Welcome back, dockside!

 Originally Posted By: kap17
For a person leaving within their means the total debt to income ratio (including housing expense) is around 35-41%.

 Originally Posted By: california rick
No one I know has that low of a income-to-debt ratio ratio of 35% - 41%.

Me neither, rick. Most middle class people I know are paying 30-50% on their house note and various insurances. Don't even start on credit cards!

I'd love to see some hard data on that. Got any, kap?
_________________________
Steve
Give us the wisdom to teach our children to love,
to respect and be kind to one another,
so that we may grow with peace in mind.

(Native American prayer)


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#86975 - 11/13/08 04:56 PM Re: What would you give up first? [Re: stereoman]
kap17 Offline
member

Registered: 07/24/08
Posts: 1026
 Originally Posted By: stereoman
Me neither, rick. Most middle class people I know are paying 30-50% on their house note and various insurances. Don't even start on credit cards!

I'd love to see some hard data on that. Got any, kap?


All I got is my 5 year experience in underwriting home loans. For the past 6 months I've been reviewing FHA loans to make sure they have been underwritten properly and follow all FHA guidelines including income ratios.

The vast majority of people outside California have DTI ratios below 41%. California is an exception because of the inflated home prices but for new loans (due to the falling prices of homes) the ratios have been a lot lower than in the past.
_________________________
A gem cannot be polished without friction, nor a man perfected without trials. ~Chinese Proverb

The early bird gets the worm, but the second mouse gets the cheese. ~Jon Hammond

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#86993 - 11/13/08 06:55 PM Re: What would you give up first? [Re: stereoman]
olyve Offline
veteran

Registered: 08/02/06
Posts: 7504
Loc: Athens, Ga.
 Originally Posted By: stereoman
You got it made, Greger. And once you sell your won estate, you can afford that ticket, and might even have some money left over to pay off your creditors.

Welcome back, dockside!

 Originally Posted By: kap17
For a person leaving within their means the total debt to income ratio (including housing expense) is around 35-41%.

 Originally Posted By: california rick
No one I know has that low of a income-to-debt ratio ratio of 35% - 41%.

Me neither, rick. Most middle class people I know are paying 30-50% on their house note and various insurances. Don't even start on credit cards!

I'd love to see some hard data on that. Got any, kap?
If you look at what Kap wrote (quoted above), he said for a person living within their means not most people.
_________________________

"Life is not about waiting for the storms to pass...it's about learning how to dance in the rain."

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#86994 - 11/13/08 06:55 PM Re: What would you give up first? [Re: olyve]
olyve Offline
veteran

Registered: 08/02/06
Posts: 7504
Loc: Athens, Ga.
good to see you, dockside
_________________________

"Life is not about waiting for the storms to pass...it's about learning how to dance in the rain."

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#87003 - 11/13/08 07:30 PM Re: What would you give up first? [Re: olyve]
Mellowicious Offline
veteran

Registered: 05/03/06
Posts: 9624
Loc: flyover country
Out of curiosity - does this ratio apply only to those buying houses? If so, is there a similar ratio for those without mortgages?
_________________________
Julia
Long time passing

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#87006 - 11/13/08 07:49 PM Re: What would you give up first? [Re: Mellowicious]
kap17 Offline
member

Registered: 07/24/08
Posts: 1026
 Originally Posted By: Mellowicious
Out of curiosity - does this ratio apply only to those buying houses? If so, is there a similar ratio for those without mortgages?


The ratio applies to everyone. Homeowners have mortgage plus insurance and taxes while renters have rent for housing expense. Both renters and homeowners have to pay for utilities (unless renters have a deal with the homeowner or appartment owner).

Added to the housing expense are the other debts such as Credit cards, car payments, car insurance, etc...

Once that is all taken in account, whatever is left is considered disposable income.
_________________________
A gem cannot be polished without friction, nor a man perfected without trials. ~Chinese Proverb

The early bird gets the worm, but the second mouse gets the cheese. ~Jon Hammond

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#87009 - 11/13/08 07:57 PM Re: What would you give up first? [Re: kap17]
Greger Offline


Carpal Tunnel

Registered: 11/24/06
Posts: 16033
Loc: Florida
My disposeable income has been in negative numbers for a while now even with no mortgage or rent. My home and land are appraised at $475K so I could sell that and buy something cheaper and get myself out of trouble. I built that house myself and have lived in it 25 years. It aint for sale.
_________________________
Good coffee, good weed, and time on my hands...

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#87015 - 11/13/08 08:50 PM Re: What would you give up first? [Re: Greger]
Mellowicious Offline
veteran

Registered: 05/03/06
Posts: 9624
Loc: flyover country
kap - I'm sorry; I knew that, but I've been reformatting a 150-page proposal all day and am short a few brain cells. Thanks.
_________________________
Julia
Long time passing

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#87019 - 11/13/08 09:34 PM Re: What would you give up first? [Re: olyve]
stereoman Offline
Carpal Tunnel

Registered: 06/30/04
Posts: 15646
Loc: Asheville, NC
 Originally Posted By: olyve
 Originally Posted By: stereoman
You got it made, Greger. And once you sell your won estate, you can afford that ticket, and might even have some money left over to pay off your creditors.

Welcome back, dockside!

 Originally Posted By: kap17
For a person leaving within their means the total debt to income ratio (including housing expense) is around 35-41%.

 Originally Posted By: california rick
No one I know has that low of a income-to-debt ratio ratio of 35% - 41%.

Me neither, rick. Most middle class people I know are paying 30-50% on their house note and various insurances. Don't even start on credit cards!

I'd love to see some hard data on that. Got any, kap?
If you look at what Kap wrote (quoted above), he said for a person living within their means not most people.

Thanks for the tip, olyve. I was hoping hard data would lead us to recognize how many Americans are living within their means. I regret that my hasty style may have left the impression that I was disputing kap's assertion.

A rudimentary search yields this factoid from the always reliable Pew Trust:
 Quote:
As expenses have risen, middle income Americans have taken on more debt, often borrowing against homes that, at least until recently, had been rising rapidly in value. The median debt-to-income ratio for middle income adults increased from 0.45 in 1983 to 1.19 in 2004. Ratios have also increased for upper and lower income adults, but not by as much.

Just a quick review: median means there are an equal number below and above that point. So for every middle income American whose DTI is less than 119%, there is one whose DTI is above 119%.
_________________________
Steve
Give us the wisdom to teach our children to love,
to respect and be kind to one another,
so that we may grow with peace in mind.

(Native American prayer)


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