Federal Income Tax Reform Proposal - Effect on Californians (Nice: home equity loan, brokers)

[Tulemutt]

Originally Posted by Bolanders

LOL. You have no clue how pensions and insurance companies work.

https://www.investopedia.com/terms/c/claims-reserve.asp

Sorry but you have no credibility when it comes to any financial conversation. Stick to thinking mortgages are based on net income. Know your limits.

Insurance companies literally have special accounts set up for claims.

"A claims reserve is the money set aside by insurance companies to pay policyholders who have filed or are expected to file legitimate claims on their policies. Insurers use the fund to pay out incurred claims that have yet to be settled. The claims reserve is also known as the balance sheet reserve."

https://www.iii.org/publications/ins...nce-accounting


"Property/casualty insurers have three types of reserve funds: unearned premium reserves, or pre-claims liability; loss and loss adjustment reserves, or post claims liability; and other."

https://www.rmf.hr/default.aspx?id=674


What does the pension company do with my money?
The pension company invests assets of the pension fund with the goal of increasing the value of the assets of the pension fund in order to ensure payment of the pension payments to the pension fund members.
Assets of the pension fund are invested according to the investment policy, in accordance with the legal provisions. The Mandatory Pension Funds Act stipulates very clearly and concretely how the pension funds can be invested, as well as the structure according to the type of the assets, states and regions, foreign currencies, economic sectors and other. You can check on the structure of the investments of each Raiffeisen pension fund at link na: mandatory retirement savings.


Literally put into a special fund that hopefully grows but that has legal requirements, etc.

And no taxes are not a Ponzi scheme. Just a ridiculous statement.

Lol bolanders. Just stop.

Mortgages are approved based on a net worth / net income computation / evaluation. Every mortgage app in the country requires filling out liabilities and expenses as well as assets and income. Basically it’s a simple subtraction ... though there can be a variety of other factorings involved (such as 20%-30% rental income down-adjustment to account for vacancy losses ... etc.). If you make $1,000,000 a year but your expenses (such as other mortgages, high credit card and other loan debt) suck up $950,000 a year, you’re not going to qualify for any jumbo loan. Lol.

And while pension funds are, indeed, structured to “earn” through investments, that is still subject to plenty of risk ... right up to complete fund collapse ... and don’t tell the readers that has never happened.

SS meanwhile is structured on a perpetually growing national economy and population. Which has always proven true, so far.

That said, both (investment funds and SS) are stupid. Because both exist requiring perpetual growth. The difference between both of those stupidities and Ponzi is, as 2Sleepy said: fraudulent intent. A Ponzi has always a limited ceiling, understood from the inception ... except to the suckers who buy in later and later to the ruse.

[Bolanders]

It’s called debt to income ratio. Period. Gross income, not net. She stated that is was based on net income which is not and has never been true.


Anyone with an inkling of finance knowledge understands using new funds to pay off existing obligations is ponzi like.

You are also incorrect on what every mortgage in the country requires


With every post it shows how less and less you truly know

[Tulemutt]

Originally Posted by Bolanders

No I never even said or inferred I played one. I simply said I had a surgical procedure to do. If you inferred that it is on you. As I pointed out before one would have to be licensed to be a doctor. I work with nurses, doctors, MAs, specialists, etc across the world. I specialize in 2 very specific diseases. When certain specifics are diagnosed I am brought in. Nothing more nothing less. As long as the checks keep clearing I am good. If that changes then so will I.

No hoss, I never inferred you were a doctor. That you are not is obvious to me.

What I refer to is exactly as you said: “[you] had a surgical procedure to do”. Without qualifying that statement YOU suborn / invite inference.

Deny all you want.

[Bolanders]

Originally Posted by Tulemutt

No hoss, I never inferred you were a doctor. That you are not is obvious to me.

What I refer to is exactly as you said: “[you] had a surgical procedure to do”. Without qualifying that statement YOU suborn / invite inference.

Deny all you want.

Your very obvious ignorance was of the medical community is why you are anyone would infer that. Sorry you don’t understand the medical field. Then again you just showed you know very little about mortgages which is ok. You should learn more before you throw obvious false statements out

[Tulemutt]

Originally Posted by Bolanders

It’s called debt to income ratio. Period. Gross income, not net. She stated that is was based on net income which is not and has never been true.


Anyone with an inkling of finance knowledge understands using new funds to pay off existing obligations is ponzi like.

You are also incorrect on what every mortgage in the country requires


With every post it shows how less and less you truly know

No, I am absolutely correct.

Debt to income ratio approval is NOT approval based on gross income. It IS approval based on [net of] the ratio.

Investment earnings are “new funds”, genius ... used exactly to pay off existing obligations.

[Tulemutt]

Originally Posted by Bolanders

Your very obvious ignorance was of the medical community is why you are anyone would infer that. Sorry you don’t understand the medical field. Then again you just showed you know very little about mortgages which is ok. You should learn more before you throw obvious false statements out

It becomes more and more obvious that your profession, bolanders, is as a ditch-digger. Good grief

Moving on now. ...

[Bolanders]

https://www.thebalance.com/how-much-...-thumb-1289846

Oops. You are wrong again

From the link:

Lenders typically want no more than 28% of your gross (i.e., before tax) monthly income to go toward your housing expenses, including your mortgage payment, property taxes, and insurance. Once you add in monthly payments on other debt, the total shouldn't exceed 36% of your gross income.

This is called "the mortgage rule of thumb," or sometimes "the rule of 28/36."

At this point it is now obvious to everyone you don’t even understand basic financial concepts.

From another article

Mortgage lenders will analyze your income and debts -- along with other factors -- when deciding whether to approve your application for a mortgage loan. And when lenders study your income, they're studying your gross income, not your net. Lenders choose this figure since borrowers are more familiar with their gross income than how much they make after all taxes and other deductions get taken from their paychecks.

[2sleepy]

Originally Posted by Bolanders

Sorry but you have no credibility when it comes to any financial conversation. Stick to thinking mortgages are based on net income. Know your limits.

keep trolling & see where that gets you

[Tulemutt]

Originally Posted by Bolanders

https://www.thebalance.com/how-much-...-thumb-1289846

Oops. You are wrong again

From the link:

Lenders typically want no more than 28% of your gross (i.e., before tax) monthly income to go toward your housing expenses, including your mortgage payment, property taxes, and insurance. Once you add in monthly payments on other debt, the total shouldn't exceed 36% of your gross income.

This is called "the mortgage rule of thumb," or sometimes "the rule of 28/36."

At this point it is now obvious to everyone you don’t even understand basic financial concepts.

From another article

Mortgage lenders will analyze your income and debts -- along with other factors -- when deciding whether to approve your application for a mortgage loan. And l lenders study your income, they're studying your gross income, not your net. Lenders choose this figure since borrowers are more familiar with their gross income than how much they make after all taxes and other deductions get taken from their paychecks.

Hilarious. Truly.

They study BOTH, Bolanders. The first question is “gross income” - to establish maximum limit. Then your expenses / liabilities adjust down the maximum theoretical loan your gross could allow if you had no debt services.

You even identify that factoring in your statement above ... requoted:

Once you add in monthly payments on other debt, the total shouldn't exceed 36% of your gross income.

That clarified, have you anything to offer on topic?

[Bolanders]

You really do not understand gross and net income.


Two people with $10,000 in income and $500 in debt expenses per month.

1 lives in CA and has to pay $500 for employer sponsored health insurance per paycheck which means $1000 per month, invests $1000 in their 401k per month. They also contribute $500 per month to their HSA. They also have to pay federal and state income tax along with the other mandatory taxes. Take home pay or net income is 4338 per month. According to your misguided calculation this person would only qualify for a $1214 mortgage payment using the 28% rule. That is hilarious and any mortgage broker would laugh at you if you told them this. Anyone who thinks that a person in CA with only $500 in debt expenses who makes $120,000 a year can only qualify for a mortgage that is about $250,000 has no possible clue what they are talking about. This person could easily qualify for a $500,000 mortgage with no problem at all.


The other lives in FL. They have no cost for health Insurance as their company pays for it. They do not put anything into 401k or HSA. They do have to pay federal income tax and the other mandatory taxes but no state income tax. Take home pay or net income is $7954 per month.



These two will qualify for the exact same amount of mortgage. The person in CA would have significantly less net income.

You are so far in over your head.

There is no normal mortgage company who studies net income. They flat out look at gross income, make sure that no more than 8% of that gross amount goes to debt repayment, and then make sure that they loan you no more than 28% of that gross amount as a PITI payment for a total of 36% of gross income.

ETA: Lo and behold anyone putting either scenario into a mortgage approval calculator online gets the exact same amount approved for both scenarios and yet the CA person has half the net income. Oops again for you. It would be extremely dangerous financially for someone to listen to you regarding mortgages.

Take it a step further for anuopen wanting to check. CA has very different net incomes than FL and TX due to state taxes and yet if someone has the same gross income and same debt obligations they qualify for the exact same mortgage amounts. In the end gross income is used when determining amounts and approvals for traditional mortgages through your major institutions.

From another site also

"What’s behind the calculation?

The debt-to-income ratio, or DTI, is a common formula lenders use for mortgage prequalification, and it comes in two varieties: front-end and back-end.

Your back-end DTI ratio, which provides the most accurate picture of money owed, is all your monthly debt divided by your gross monthly income. Conventional mortgage lenders generally prefer a back-end DTI ratio of 36% or less, but government-backed loan programs may allow a higher percentage.

NerdWallet’s prequalification calculator looks at back-end DTI while also considering other aspects of your credit profile, such as employment, credit score and down payment."

From Zacks:

Mortgage lenders will analyze your income and debts -- along with other factors -- when deciding whether to approve your application for a mortgage loan. And when lenders study your income, they're studying your gross income, not your net.

From the budgeting.thenest.com:

Mortgage lenders are interested in how much you make before you take any tax deductions or pay taxes on your earnings. Typically, you apply for a mortgage as an individual, rather than a business, so the lender is concerned with gross income, not net income.


https://budgeting.thenest.com/mortga...ome-28149.html

Specifically states:

Mortgage lenders use your gross income to determine whether you qualify for a mortgage and how much you can borrow.

I am sure you will let us know every single publication is wrong and you are right.

From Wells Fargo specifically:

Income and debt
Annual income before taxes (including non-taxable) Learn more about annual income before taxes
$
Total monthly debt payments Learn more about monthly debt payments
Don't include living expenses such as utility bills, food, and entertainment for more accurate results.
$

Debt specifically asked for are only student loans debt, CC debt, auto loan debt, and home equity loan debt, not health insurance costs, or utility costs, etc.

Please point us to one publication that specifically uses the term net income to describe how a mortgage company will approve. You won't and can't but I am sure you will obfuscate in someway as seems to be the norm.