Quote:
Originally posted by Moneyguy1
Given average indebtedness, the monthly PITI was not to exceed 35% of gross income.
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Someone will chime in, but I expect you will find that the banks are being a little more "flexible" than in the past.
My private opinion (very much 2 c worth) is that the housing markets in many parts of many countries will suffer somewhat of a correction that, if it is cause by, or coupled with, any other economic issue affecting home affordability (higher interest rates, unemployment, stagnant wages) is going to hurt the banks. Or whoever holds the mortgages - I never quite understood the whole Fanny Mae/Freddie Mac thing.
Banks in NZ/Australia (they're pretty much all Aussie) have spent the last few years growing profits at a huge rate on the back of home lending. They have further earnings growth expectations from their investors, and so they are chasing more and more mortgages.
Especially the "revolving" mortgages - for many people they end up becoming not much more than an interest only mortgage...