Debt to income Ratio.

[01Jes]

So you log all your recurring monthly debt(mortgage, taxes, insurance, car loans, credit card loans, etc loans) and divide by gross income. Then comes your debt to income ratio. Mine is 25% using gross income, mostly all sites express keep it under 36%. However, if I use net income it's 32% which is more realistic to me. If lenders know consumers will be taxed out the ass why don't they use net income instead of gross income to calculate debt to income ratio. Do they want the least educated consumer to fail?

 

[rotor_powerd]

Tax rates vary so they use gross income to have a consistent guideline. As you point out, at the end of the day it's still up to you to figure out what you can afford.

 

[mcaligiuri]

I'd say yes they want them to fail. Apparently you haven't heard of the housing bubble we had a couple years ago. It's all a scam

 

[Teethy]

I'd say yes they want them to fail.

It costs a lot of money to be stupid. I don't pity the people that dig themselves into a hole.

 

[soccerman002]

If you don't factor the taxes that you pay into the equation, that's your fault.