I agree with all that you have stated. However, when you have an application in which your debt to income ratio is high, income is low and savings is similarly low for the current d/i, I would recommend that these individuals wait a year or two before taking a plunge OR look for a unit of lesser value that would satisfy their aspirations. Sometimes elimination or reduction of debt is better than looking for greater trouble.

I do not consider equity a problem: 0%, 10% 20% or 100% is not an issue if the mix is affordable to the individual at the end of the transaction. I had the experience of asking an escrow to a potential buyer who was giving 20% down. The person had a high d/i ratio,a good salary, no savings to speak of, and a high mortage+maintenance payment to make at the end of the transaction in spite of the 20% equity. The person was very upset with the escrow request and stated that 20% was sufficient to impress the Admission Committee. My response was as follows: ÿou could have given 10%, retain more cash in your savings for contingency or emergency and would have probably avoided the escrow.

Again, the mix and financial picture at end of the transaction is as important as the snap shot prior to purchase when dealing with these situations.

AdC