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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Lizzie Tudor who wrote (70866)	10/3/2006 6:31:38 PM
From: Wyätt Gwyön	Read Replies (4) of 110194

For a dual income family bringing in 16K/mo - a DTI of 35% means they have $10,400 per month left over for living expenses. that is delusional. do these people pay no taxes? in a high tax state like Clownifornia they probably pay at least a third in taxes. say 6K. so that leaves 10K disposable. being image-conscious, they each have $500 car leases. so 9K. they have 40K in CC debt, so there's another couple K (do you think the average Clownifornian making 16K a month has a monthly CC bill under 2K?). down to 7K. if they save 10% of gross they're down to 5400. so around 5K to cover living expenses and home. if they spend the entire 5400K on their home, they will be just fine as long as they don't eat, drive, or have insurance payments. so, this is why you have 35% DTI--so that you don't give people too much rope to hang themselves with. if this standard were actually observed, prices wouldn't have gotten so expensive in the first place. increasing the DTI standard does not increase affordability; it just increases the prices.

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