Here are a couple more financial ratios that I've calculated.
The first is the minimum payments for all non-mortgage debt (credit cars plus van loan) that we owe divided by monthly (after tax) income. So, it's not necessarily what I pay, because I've been paying more than minimum, but I's what a bank would calculate if I went in for a new loan. My non-mortgage debt payment to after tax income ratio is: 13.7%.
The second is the same calculation, but I include my mortgage debt. That ratio is: 33.4%.
I would feel a lot better if that first calculation was less than 9%, and the second calculation was less than 30%. Actually, I would feel a LOT better if the first calculation were 0. There are, of course, two ways to improve those calculations - boost income or reduce debt (or stretch out payments, but I don't want to go there).
I've read that mortgage companies will approve loans that make your total debt to income ratio up to (and even beyond) 40%. That's scary. Things would be pretty tight if 40% of our income were going to debt repayment.
More Financial Ratios
August 29th, 2011 at 02:09 pm
August 29th, 2011 at 04:54 pm 1314633281
You're making good progress.