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Puts an upper limit on how harsh the debt load can get... on a month-to-month basis. If you're deciding affordability based on monthly obligation instead of tot
by Domenic_S 12y ago
Puts an upper limit on how harsh the debt load can get... on a month-to-month basis. If you're deciding affordability based on monthly obligation instead of total cost, you're doing it wrong.
- sp332 12y agoThe max total cost is 10% of your income for 20 years. After 20 years you just stop owing any money, you're done. Making the monthly payment is more important than total nominal cost. That's because missing a payment adds penalties that make it much more difficult to get out of debt. So making sure the monthly amount is doable is really important.
- Domenic_S 12y ago> making sure the monthly amount is doable is really important. Of course it is, but you can't be so preoccupied with the monthly affordability that you forget about the total cost. (N.B. this is a trick car dealers use every day to get you to pay too much for a car) In this sense it's not unlike the US healthcare debate where everyone was so preoccupied with how to make hospital bills affordable with government-mandated insurance that we totally forgot to ask why an aspirin costs $75 in the first place.