Jumbo Stated Income Loans & the Successful Enterprising American Home Buyer

Capital, not earnings, is what produces security. Only a large amount of capital has the ability to produce a sufficient income in these instances.

How is this so? In a word, taxation!

High Taxation:

If it costs an individual more to live today, exactly the same applies to society as a whole; or, in more precise terms, to the government that administers, sustains, and protects the economic life of the people. Thus, the inevitable accompaniment of the successful life...taxes.

Spell out its implications in figures, and the present-day tax impact on capital and earning power is clear. In 1939, a married man with two children earning a salary of $25,000 paid out about $1,700 in income taxes. In 2003 a person on the same salary will pay some $3,750 in taxes. Do you want to earn a net of $100,000? Then you must gross at least $128,000.

This is what economists call the "tax squeeze." The phrase is apt. A person's earnings, his profits or his inheritance are caught in the grip of a vise; the excess is squeezed out. What is left may be enough for support, but it often leaves precious little for security let alone a new high-end home purchase. Security, if you remember, is based on capital, and this is what taxes make it so difficult to accumulate. The problem is the same for nearly all the stages of success in society; for the salaried junior or top person; for the businessperson; even in some degree, for the person of fortune. (Adams 11)

So what is a small- to mid-sized business owner to do? Search to find as many tax shelters as possible and pay himself less; the benefits of owning your own enterprise. The pitfall of course being that when the bank asks to see your financial profile to qualify you for your new home loan, there's an ample deficiency reflected and your loan application is denied; never mind the petty cash account you use to support your lifestyle.

What of the new Jumbo (high-end) home purchase you had in mind? A Stated Income, No Ratio, or No Income No Asset (NINA) loan will do you just fine. And YES Wall Street is financing these types of transactions still. Just look here!

Jumbo Loan = $417,000+

Financing Solutions

Full Doc to 95%, SIVA to 90%, No Ratio to 80% and NINA to 75%

For more information on Loan Programs & Guidelines, please contact 323.810.2175 or 866.934.3444 ext. 111.

Residential | Commercial | Construction Investment Advisor

Cell: 323.810.2175 | Office: 626.765.0444 ext. 111

Rbueno@wilshire-financial.com | www.ricardobueno.com

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA.

Reference:

Adams, Kathleen. The Complete Estate Planning Guide: The Most Complete and Authoritative Guide to Building Maximum Financial Security for Your & Your Heirs. New American Library 2005

Posted Sunday Oct 14

(10/14/07 03:11PM) — Lenn Harley

Good post Ricardo.

I have long advocated that home buyers try to understand the tax implications of their purchase. I do a careful analysis to show them how they benefit over the first 5 years.

There was a time, prior to 2005 when leverage was a large part of buying a new home. No more. At least not until our homes begin to appreciate again.

Tough, tough market.

I don't know if I'd want to be writing the NINA in our market. We just could lose 25% of market value before this disaster is over. In the 1990 crash, Northern Virginia homes DID lose 25% of market value.

(10/14/07 03:28PM) — Elizabeth Nieves - Bilingual Raleigh - Durham North Carolina Real Estate Team

GREAT information! I want to learn so much more about finances. I'm pretty good at EARNING money...I need to learn how to KEEP more of it! :-)

(10/14/07 03:30PM) — Tom Burris | FHA VA & Conv. Texas Mortgage Loans

Don't forget the appraisal review..... an important ingredient these days

(10/14/07 03:35PM) — Ricardo Bueno

Lenn: thanks for visiting! Generally speaking...

I have what (2) two conditions when applying for a No Ratio or NINA Jumbo Loan:

They meet with my Financial Advisor for a pre-qualification interview. This isn't to solicit services or anything of the sort. It's more to determine a borrowers financial health. I won't underwrite a No Income No Asset loan if a borrower is anywhere near a state of financial insolvency. Furthermore, and in some cases, I like to establish accountability checks. All key elements to establishing and preserving a successful estate.
They meet with my Accountant or I meet with theirs. This is the person with the greatest continuity and familiarity of someone's financial affairs; past and present.

If between these parties we can determine that a borrower qualifies for a Jumbo Purchase then we'll underwrite a No Ratio or a NINA loan. I'm not trying to discomfort anyone and I certainly want to get the deal closed, but I won't through a NINA loan out there for my bottom line benefit unless I know the borrower can afford it.

(10/14/07 03:46PM) — Ricardo Bueno

Elizabeth: Hola! Un problema que todos tenemos...earning money and keeping it! How life would be different if we all exercised greater financial discipline.

Even today with our whole "credit" debacle it appears we're beginning to see just how much of America was living beyond their means. All products of poor financial discipline and easy money.

I suppose that's why I'm such a stickler for due diligence!

(10/14/07 05:15PM) — Edith Wharton, Chester Va Realtor

Well, well....I already commented through email, but I didn't get a chance to tell you how good you look in pink ! ;0)

How can I do that to my pic?

(10/14/07 06:01PM) — Ricardo Bueno

Sarah Cooper was the one who helped me put the pink picture together. Shoot her an email and ask her if she minds putting one together for you; I'm sure she wouldn't mind :-)

(10/14/07 06:03PM) — Edith Wharton, Chester Va Realtor

Thanks! I will. ;0)