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I see: it is true, from the bank's perspective, in the specific case of mortgages, because they're no-recourse

• JumpCrisscross 4y ago
  > in the specific case of mortgages, because they're no-recourse This varies jurisdiction to jurisdiction. And it isn't really germane to the question of quantifying one's leverage, which is a going-concern analysis.
  • jefftk 4y ago
    > going-concern analysis But then don't we need to get into evaluating future earnings?
    • JumpCrisscross 4y ago
      > don't we need to get into evaluating future earnings? Yes, many flow leverage ratios look at this, e.g. interest to Ebit.
      • jefftk 4y ago
        That's just a bit of a funny thing to do with a homeowner, no?
        • JumpCrisscross 4y ago
          > bit of a funny thing to do with a homeowner, no? This is why mortgage lenders test your debt burden and interest cost against income.