Tag Archives: Residential

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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Buying a House? What to Know


Home Buying Made Easier

A home purchase is a big decision and can stress out anyone. I have helped hundreds of people with their first, next, second or third home and there is a proven way that works best.

Buyers have to make many decisions from start to finish and when there is an unexpected turn nerves can fray quickly – all this while moving plans are being made. Not easy.

If the house is the right one, at the right price with financing that fits then don’t let it get away. I have owned many homes and built three and there is nothing like having your own home.

The 10 things to do:

  1. Get pre-qualified for a mortgage – You need to know what home price will best fit you financially. With this done you can search with confidence.
  2. Select an experienced loan consultant to get the pre-qualification. Call someone you trust for a recommendation. He or she should spend the time needed to answer all your questions and earn your trust. If that happens stay with him or her.
  3. Identify homes and neighborhoods in your price range – Most search online and it’s a great way to see homes in detail, learn about schools, transportation and commute, activities and more.
  4. Choose a Realtor – I have a real estate broker’s license so I could represent myself. I never would do this and neither should you. Go to an experienced, local realtor and get recommendations again from someone you trust. The best ones work very hard to get you the home you want and continue to do so right through closing.
  5. Know what to expect – I always give buyers a written guide on what to expect with the loan process. Getting a loan is not easy. It’s more about a “perfect loan file” than “are they qualified?” There are things to do and not to do to avoid delays or worse. A great realtor also will prepare you for what to expect.
  6. Be responsive – Send your loan person everything asked for, exactly and completely, right away. It is needed regardless of how silly or stupid it seems.
  7. Ask questions – There are a lot of moving parts and precise steps to getting a home legally yours with a loan attached. Ask questions to be sure you understand them and are making the right choices.
  8. Be available – By phone, email for questions and decisions. A vacation a few weeks before escrow closes is not a good idea. Keep your loan officer and realtor informed how to reach you.
  9. Breathe – You have the right house, loan officer and realtor so let them do their jobs.
  10. Enjoy – You have earned it. Enjoy your new home.
Have questions?

Ask David

310 456-1056

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ID Theft – Children, Too?


Identity theft is the fastest growing crime in the US. It isn’t just someone buying tons of stuff at some stores, in some city, in some state you have never been. Happened to me, both daughters and my wife. How about you?

Here are some other ways you can fall victim:

Driver’s license – tickets, accidents, and more that you find out about when the CHP orders you out of your car and off to jail

Medical – Hospital and medical bills in your name that trashes your credit. Especially popular is Medicare fraud.

Social Security – Love the fact that SSA tells you to not keep your social security card with you but Medicare ID card is issued with your your SS #, cleverly disguised with an “A” after it.

Character/Criminal – Using your ID to hide behind you for criminal activities.

All kinds of scum are working hard to hack into Facebook accounts (600,000 attempts thwarted each day! – how many get through?)

Account information in the hundreds of millions is stolen/left open from companies, banks, and even the IRS, Veterans Administration and Sony Playstation!

What can you do to keep non-public, private information safe?

  •  www.annualcreditreport.com – Check your credit for free every four months by selecting each of the 3 credit bureaus in turn
  •  Check your children’s credit reports as well. Social security numbers for infants have been stolen and used to apply for credit
  •  Go over all credit card bills for accuracy
  •  Shred mail (cross-cut shredder)
  •  www.Identitytheft.com – learn all the “red flags” and how to protect yourself
  • http://www.consumer.ftc.gov/features/feature-0014-identity-theft – more information from the Federal Trade Commission
  •  IRS ID Theft – 800 908 4490 – Best is that you are assigned one person at IRS throughout the process. Explain only once.
  • SS Fraud – Report and get help at 800 269 0271
Have questions?


310 456-1056

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