What is the allowable USA debt service ratio ?

[Lenny]

Here is ours.


Gross Debt Service Ratio (GDSR) - this should not be above 32%

Percentage of your gross income that is applied to:
- principal (monthly mortgage and/or rent)
- interest
- property taxes
- heating costs
- 50% of condo fees (if living in strata condo unit)

ie. - if all of those things add up to $2000 and your income is $6000 then
your GDSR is about 33% ($2000 div by $6000)


Total Debt Service Ratio (TDSR) - this should not be above 40%

Percentage of your gross income that is applied to:
- all personal loans (credit cards, Lines of credit, investment loan etc.)
- mortgage payments/rent
- property taxes
- heating costs
- 50% of condo fees

ie - if all of these things add up to $2500 and your income is $6000 then
your TDSR is 41.6% ($2500 div $6000)

Banks usually use the Total Debt Service Ratio - to include all other credit
and loan debt. If you took out an investment loan, that would be included
as personal loan.

That is here. (Canada)

[glashole]

that explains why they won't give me any more money.................

[txtaz]

You're kidding right?

At the rate we are going, we spend as much as we can borrow. Novel concept thought, perhaps I should send it over to Congress.

Da Taz

[The Hedgehog]

WE don't have one. We are free to borrow ourselves into a financial crisis. :toiletpap

Most prudent banks use 35%-45% net/gross. I have seen those at over 100% and thought that the credit card companies deserve what is coming. Well it is here. Bad business

[txtaz]

Well it is here. Bad business

AMEN!!! So why is our $700 Billion bailout going to help bail out top bank executives?

Da Taz<---Yeah I'm still really pissed and my congresman doesn't really care.

[Ghost]

Lenny,

Individual mortgage programs have them, called front and back ratios. My other half used to work for a mortgage company years ago. I think typical maximum debt ratios were:

29% 41% for FHA loans

32% 38% for conventional banking programs

Sub prime loans would have higher limits I think, with the increased risk no one paid attention to. F-ers.

Mike