What are revolving accounts? And I know mortgage/rent, utilities, insurance are not considered, but a car payment is, right?
2007-06-03 07:51:50 · 6 answers · asked by ron-D 7 in Business & Finance ➔ Personal Finance
A car payment is NOT a revolving account. It is an installment loan, just like a mortgage. Revolving accounts allow you to borrow more (up to your credit limit) at any time and pay them off over time. Examples include credit cards and Helocs. As for a 'good' debt to income ratio, most mortgages require no more than 35% total debt to income ratio. I can tell you form personal experience, you can't afford that much debt. The BEST debt to income ratio is ZERO debt.
2007-06-03 08:15:06 · answer #1 · answered by STEVEN F 7 · 1⤊ 1⤋
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RE What is considered a good debt-to-income ratio?
What are revolving accounts? And I know mortgage/rent, utilities, insurance are not considered, but a car payment is, right?
2014-09-18 03:57:36 · answer #2 · answered by Anonymous · 0⤊ 0⤋
If you owe anything other than on a mortgage, then that is a bad ratio. Carrying any kind of debt means you are giving a portion of your money away. If people learn to buy only what they can pay for this month, then they will be happier, will retain their own money instead of paying interest and will be able to build for an early retirement.
2007-06-03 10:27:06 · answer #3 · answered by Anonymous · 0⤊ 1⤋
Anything below 55% is a good debt-to-income ratio. If its higher than that, majority of lenders will not want to give you a loan.
Revolving accounts is where if you pay the minimum balance at the end of the month, you can continue to use the credit card for next month.
2007-06-03 09:13:18 · answer #4 · answered by Anonymous · 5⤊ 1⤋
your 15 year fixed rate mortgage should be no more than 25% of your gross household income.
you should not have a car payment or credit cards.
paying interest is the best way to assure yourself that you will never earn any.
the goal here is to save, not spend what you do not have.
2007-06-03 08:00:55 · answer #5 · answered by Anonymous · 2⤊ 1⤋
ideally ... high income and no debt is best ratio
2007-06-03 07:55:29 · answer #6 · answered by sjhynes 3 · 2⤊ 1⤋