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