Explain why the 28/36 percent rule is so important to understand
What will be an ideal response?
Answer: A reputable lender wants to make sure that they will get their money back. They do not want a borrower to be unable to comfortably afford to make their mortgage payments. Statistics have shown that borrowers cannot comfortably afford to make debt payments more than the 28/36 percent rule allows. Any more than this and the borrower cannot afford to enjoy their lives or save money for other goals. The 28/36 rule allows for a safety buffer that allows the borrower to handle unplanned emergencies without forcing them to miss their mortgage payments. Statistics show that borrowers within these debt limits default less often on their mortgages.
Diff: 3
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