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Why we shouldn’t worry about debt-to-income record

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Real Estate Professional | 17 Mar 2017, 02:57 PM Agree 0
One big bank is arguing the debt-to-income ratio is the most “useless economic indicator out there”
  • Dick Brady | 17 Mar 2017, 07:30 PM Agree 0
    Of course we shouldn't worry about a debt to income ratio of 1.67 - the Ontario Liberal Government doesn't worry about a debt to income ratio so why should the average plebeian worry. The Banks don't worry because they have the necessary back up equity to cover the loan and the Provincial Liberals have us the people to tax to death. However, the debt is so high that any change in the interest rate will cause certain disaster with the individual borrower. In the case of the Provincial Government(?) they need not worry about a lower credit rating causing a
    larger payback because they simply tax us more, but the individual Canadian.....????
    . A horrible situation.
  • Lawrence Kobescak | 18 Mar 2017, 12:35 AM Agree 0
    That's an insightful point Benjamin.
  • MAYBE | 18 Mar 2017, 04:39 AM Agree 0
    The governing parties do not worry about their debt ratio because they personally don't have to pay for it. Their incomes and pensions, are determined by their own votes. Unlike most working people whose wages and number of hours worked are determined by employers and economic conditions. Government debt is dependent upon how much income tax is expected to be collected in the years ahead. Income tax is only used to pay the interest on government debt. It does not support education, health care, or any social services or infrastructure. The foregoing are supported by other taxes e.g. fuel, alcohol, sales, licensing, fines, property and possibly some of the debt. The next step is the privatization of our water, sewers, garbage dumps, roads, hydro systems, etc. just like the third world countries. Debt is the same for governments as it is for individuals, when we sell RVs, boats, motorcycles, and other things of value in order to maintain financial comfort. Problem is that we feel the strain long before the governments or individuals who own our resources and infrastructure.
  • John Nairn | 27 Mar 2017, 08:18 PM Agree 0
    ...the thing that many of my mortgage broker associates tell me over and over again is that people need to 'downsize' their credit card debt. And if there is to be be any new legislation concerning real estate prices and financing guidelines it should be a cap on what % cc companies are allowed to charge consumers - it's verging on usery. My mortgage brokers tell me time and time again that the single biggest thing that kills most mortgage apps is cc debt...
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