I'd say that pay raises "count" to lower the ratio, but paying down the principal does not. The payments aren't changing, after all.
I think paying down the principal counts because it helps change how fast you could pay off the mortgage. The payments you refer to are only the minimum payment -- most mortgages let you overpay. Ours definitely does.
Also, even if you don't overpay, a lower principal value lets you refinance to a longer-term loan with lower payments, which also increases the overall safety of the loan.
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Date: 2008-10-13 12:09 pm (UTC)I think paying down the principal counts because it helps change how fast you could pay off the mortgage. The payments you refer to are only the minimum payment -- most mortgages let you overpay. Ours definitely does.
Also, even if you don't overpay, a lower principal value lets you refinance to a longer-term loan with lower payments, which also increases the overall safety of the loan.