9/26/23 – How to calculate hourly workers that went on strike!

The studio workers are returning to work, and I am happy for them, assuming everything starts soon now that the strike is over. What does that mean if they are getting a loan?

The strike was 146 days, 40% of the year, making it difficult for many workers to qualify for a mortgage. Oh, wait a minute? I am being told that 90% of those workers were on disability, not Unemployment! Now, that’s a different story altogether!

When calculating hourly wage income, we must average the pay for the time worked over the past two-plus years. We can deduct time that a person is on disability from the months we would use to calculate income. We must keep the months for someone on Unemployment!

We have a borrower who made $144,000.00 in 2021, 156,000.00 in 2022, and $70,200 Year to date before the strike. Now he is back to work, YAY!

To calculate the income with disability, we can take away the 146 days he was “injured,” so the average income is:

$144K + $156K + $70.2K = $370.2 / 29.4 months = $12,591.84 per month

The unemployed guy with the same job and the same income will have the following calculation:

$144K + $156K + $70.2K = $370.2 / 33 months = $11,218.18 per month. Oh, no, he won’t! The average income is declining this year, so the income is $70,200.00 / 9 = $7800 monthly!

Be careful with those online approvals as many of the lenders do not know this because they have never dealt with this!  This can and will be an issue and I am here to cross qualify if needed.

I know what you are thinking: this is unfair because the guy who faked the disability can qualify for a much larger loan than the honest guy who went on Unemployment! Guess what? Life is not fair, and I know you know that!

Condo / Townhome issues we know of now:

1. American Beauty Village – Insurance
2. Scenic Hills – Insurance
3. Mariposa – Litigation – Agreed upon, but not yet recorded
4. Bouquet Canyon Village – Insurance
5. Scenic Hills – Insurance
6. Madison – Litigation
7. West Creek / West Hills – Insurance
8. Cornerstone – Insurance
9. Canyon Oaks – This is new!!!

Please let me know if you hear something new on Condos or Townhouses. We will see premiums increasing, likely increasing the HOA Fees soon!

Friday was an excellent day for interest rates, but Monday took away all the gains and more! Today is more of the same, and rates are increasing again! We will see where this takes us; rates are the highest since 2002.

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• We do loans in all states, so call me with anything you need.  
• Government Loans (FHA / VA) are in the high 6’s.
• Conventional Loans up to $726,200.00 are in the high low to mid 7’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in 7’s
• Jumbo loans above $1,089,300 are in the 7’s
• Bank statement loans - They are available with 10% down again! 7’s and 8’s + depending on down and credit score.
• No income qualifier – 40% down with reserves! In the 6’s!
• 0 down loans are in the mid to high 7’s – 660 credit score min right now, up to $740,000.00.
• Private Money lenders - hard Money Loans – 35% down!
• No Ratio Loans 30% down
• Debt Service Coverage loans with as little as 25% down
• Bridge Loans - are typically 8.25% with limited fees – But they get you where you need to go!
• 0 down California Dream for all Equity Share – Postponed until October???
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I am around all week if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. Please text me at 661-714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!