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

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Justin da Rosa | 17 Mar 2017, 02:53 PM Agree 0
One big bank is arguing the debt-to-income ratio is the most “useless economic indicator out there”
  • Dizzy | 17 Mar 2017, 03:57 PM Agree 0
    So a normal functioning economy is for debt to increase? Of course that is normal for a bank as they make money and profit from debt. This debt is separate from mortgage debt so mortgage debt is not included in this ratio.

    But who can argue with a bank that spending .67 cents more on every dollar of any disposable income is not a good thing. And I suppose that comparing debt to income ratio does not mean a thing. So where does the money come from to pay down or even just pay the debt if not from income? If not from income then where? I can only assume that this person has spent years as a politician.

    So when people can no longer afford to service their debt and begin defaulting on payments on such debt as lines or credit and credit cards and personal mortgages, all will still be good for the healthy economy.

  • Dizzy | 17 Mar 2017, 04:01 PM Agree 0
    So a normal functioning economy is for debt to increase? Of course that is normal for a bank as they make money and profit from debt. This debt is separate from mortgage debt so mortgage debt is not included in this ratio.

    But who can argue with a bank that spending .67 cents more on every dollar of any disposable income is not a good thing. And I suppose that comparing debt to income ratio does not mean a thing. So where does the money come from to pay down or service the debt if not from income? If not from income then where? I can only assume that this person has spent years as a politician.

    So when people can no longer afford to service their debt and begin defaulting on payments on debt such as, lines of credit and credit cards and personal mortgages and auto mortgages, all will still be good for the healthy economy.

  • Hans | 18 Mar 2017, 10:41 AM Agree 0
    The debt issue is totally dependant on how the debt is managed. If most of your debt is on appreciating assets, and is not in arrears, then the ratio means very little . On the other side ,if most of your debt is personal , also called liabilities on depreciating items then your ratio of debt to income is a lot more important .
  • Realtor | 18 Mar 2017, 10:55 AM Agree 0
    When your debt is rising eventually you will be bankrupt
  • Realtor | 18 Mar 2017, 11:05 AM Agree 0
    Debt is rising. In Toronto, Vancouver houses is out of reach.
    If this happens in banana republic I would say that politishen who can solve this problem are payed off by mafia
    • | 18 Mar 2017, 02:07 PM Agree 0
      Thanks for your insight. Very informative.
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