I think that it should be computed based on the assumption that the loan will be a 1-month interest only, that the buyer should be ‘allowed’ to overstate income by 100%, and that mello roos and HOA taxes don’t count as monthly costs. Additionally, median income for the area should be tweaked to reflect illegal earnings that go unreported such as gambling proceeds and Del Mar horse track winnings. We all know that most people here win a few k there every summer, and also go to Vegas and win anywhere from 5-10k. On top of that, we all receive gift money from relatives for birthdays and holidays and we should add that to the value as well. And why aren’t we including cash withdrawals from credit cards? Surely that should count as income as it helps make housing more affordable. Lastly, housing really is more affordable because we have to count the home equity line that the buyer will get the week after they close. That will really help cover payments…
