Quote:
Originally Posted by kscarrol
Without diving into the weeds, most folks in coastal states were happily voting for Hillary who was going to raise taxes on the "wealthy", and the most common number thrown around was income of $250,000 or more. I know that would likely change through the legislative process but they were going see a tax increase and were generally ok with that. Now in the new tax bill, many are seeing a tax increase but suddenly it's a problem.
Assuming normal other expenses of car notes etc, you need income north of $250,000 to afford a $500,000 mortgage. And I am talking the mortgage, not the value of the home, assuming some money is put down.
So bottom line is we can argue the merits of the tax cut and whether it is smart given the fiscal challenges the country faces but the folks complaining about increasing taxes under this bill were likely going to see higher taxes if Hillary had won... and supposedly they would have been OK with that.
|
You do not need $250k/yr to support a $500k mortgage. At current interest rates, that is ~11% debt service ratio. By that logic, people making $50k/yr can only affford a $100k house. Where I live, the average house price is ~$350k and $100k buys you a dump in the hood. I know for a fact the average household income is not $175k in this part of Canada.
Now I am not a proponent of maxing out your debt but unfortunately, not very many people will be able to keep their debt service ratio at 11%.
Cheers,