Tag Archives: mortgage broker

David’s Angels

80Day in Long Beach

My daughter asked me along to help on a Habitat of Humanity build in Long Beach last week. Had to take the shot above with the beautiful Ingrid Sophie Schram, Lauren Glazier, and Beau Garrett.

The rest of the (guy) volunteers were quite jealous and there was some distraction – not good on a construction site.

Great fun for a great cause (www.habitatla.org) but I also learned about an amazing place to get great stuff for your home at great prices.

Secret Place and Hollywood, Too

Married to Randi means I know home remodel. In fact we have built 2 1/2 homes (more on that 1/2 number another day). What I wish I had known is about Habitat’s two stores. Here’s the scoop:

The ReStore is a social enterprise of Habitat for Humanity of Greater Los Angeles (HFH GLA). It was established to be a self-sustaining funding source for HFH GLA and to provide our local community with low-cost building and home improvement materials.

The ReStore sells donated materials including new and gently used furniture, appliances, lumber, hardware, vintage, and unique items to the public. All prices are at least 50% off retail value and all proceeds from the ReStore are used toward the Habitat for Humanity mission to end substandard housing worldwide.

Bargains and Important “Green” Projects

  • Since 2004, the HFH GLA ReStore in Gardena has helped divert over five million pounds of reusable materials form local are landfills.
  • Both the Gardena and Norwalk ReStore locations are “e-waste” colleciton sites. Donations of television and computer monitors, computer towers/hard drives and other electronics help keep electronic waste from landfills and help HFH GLA fund building projects all over the greater Los Angeles area.
  • Trucks are sent out daily to pick up items all over Los Angeles, too.
  • The ReStore receives new, used, discontinued or surplus building materials, appliances, and home furnishings from companies, contractors, retailers, film, and television studios and individuals.

Home Goods meets Home Depot meets Marshalls meets Hollywood

Stuff arrives daily and fans wait for the stores to open. Never know what – from paint rollers to Traulson Freezers at great discounts. TV and movie productions donate from sets so you may find something from Breaking Bad or Star Trek – not labeled buy fun to guess.

Check it out at www.shophabitat.com

Want to help? www.habitatla.org

 

Have questions about a home or commercial loan?

Ask David Garrett

310 456-1056

 

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Do I Make Enough to Get a Home?

72So, You Think You Know How Much You Make?

When starting a home search one of the first questions I hear is “what price home can I get approved for?” (I know, not great English)

You need enough income to cover the mortgage, property taxes, insurance, HOA fees (if any) plus any other monthly debt payments with at least 55 cents per dollar income left over. It’s what’s called debt-to-income ratio or DTI and while it can sometimes be higher or a bit less, it is about 45% maximum.

For example – A $350,000 price home with 20% down would have an estimated mortgage payment plus monthly “budget” for property taxes and insurance of about $1,900/month*. If car payments and credit card or installment loans equal another $600 then the total monthly amount would be $2,400. For that the minimum income needed would be $5,515 monthly at 45% “DTI”.

Of course the first question to I ask back is what payment amount  do YOU feel comfortable with. It’s not unusual that I hear less than what they could get.

That’s fine, in fact a better answer.

Salaried or Self-Employed?

Caution – Lender’s math is complicated when calculating your income. They want to see a two year history of predictable income. That makes sense, right?

So if you are full time, paid a salary and have been doing the same kind of work for 2 years then the current gross income is what is used. If, like a lot of people I see in LA, you are still writing that script and your income fluctuates you will never be able to calculate the income a lender will use.

Self-employed or salary both can work. The second just requires more math and experience – that’s what I do.

Tip – remember about the 2 year income history? If you are thinking of buying a home (or getting a refinance) don’t quit your day job and start writing that script full time yet. You see self-employment income is calculated as a 2 year history of NET income based on last 2 years’ FILED tax returns.

Long time to wait.

What’s Your Number?

I can help you with that so you will know what your “qualifying” income is. I might even be able to help with some script ideas.

Have questions?

Ask David

310 456-1056

*A $280,000 loan with a rate of 4.5% (4.589% APR) is $1418.72/month

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A Mortgage For Fred

57I don’t recall if Fred Flintstone had a mortgage. Or Barney, for that matter. They both had jobs, cars (sort of) and kids so they probably had mortgages.

 

If so the only thing that changed since then is the amount of paperwork. Of course that would be the case as there wasn’t any paper then.

 

Sammy Grindstone, the loan officer, asked the same questions we do today so that First Bailout Savings got its money back. Like today they wanted payments on time and not Fred’s house instead.

 

Today we have credit reports, computer loan approvals, automated appraisals and lots of lender rules, hoops and stupid requests. All of this sophistication is to assess risk – will the mortgage be paid back as promised?

 

Well, we all know that it didn’t work so well recently. That was because lenders stopped checking if the loan would be repaid.

 

No more — but the good news is rates are still very low and home prices, while up, are only back to 2004 levels. The loan process today is an excellent check to make sure the payment is manageable for the long haul.

 

58Getting A Mortgage

 

When someone applies for a loan these are the age-old questions:

 

  1. CAN you repay the loan? Do you have sufficient, predictable income and is it enough? No surprise you need to show tax returns and paystubs and employment of at least 2 years
  2. WILL you repay the loan on time? A credit report is evidence of a willingness to make payments. The longer you have had credit, used it and paid back on time the better chance you will continue to do so. No credit? No way to know.
  3. DO you have “skin” in the game? That’s what a down payment is and the bigger it is the more beans for dinner if income problems arise.
  4. DID you save enough for the down and for a “rainy day”? These are called “reserves” and why bank statements are needed.

 

Reasonable questions, yes?

 

Of course most loans today go to Fannie Mae, Freddie Mac, FHA or VA so we are dealing with government, not so much businesses. Crazy, stupid, nonsense stuff sometimes but they all start with answering the same 4 questions

 

Fred did.

 

Questions about credit, mortgages or commercial loans?
 
Ask David Garrett  
310 456-1056

 

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