When you purchase a home, be very cognizant of what the property taxes will be. Here in California, most realtors and loan officers calculate annual property taxes at 1.25% of the purchase price. While that may be a safe percentage in the majority of cases, in others it most certainly is not.

In Los Angeles County, believe it or not, the annual property tax rates can vary from 1.02% to 1.55% yearly. As long as the home you purchase has a tax rate not too much more, or less than, 1.25%, if that's what is used to determine your expected property taxes, you're okay.

However, if the home you intend to buy is in a 1.55% property tax area, and the property taxes are calculated at 1.25%, you could be in deep trouble depending upon how your monthly income compares to your monthly debt. This relationship is called the debt-to-income ratio (DTI).

To put this into proper perspective, let's say you plan on purchasing a $300,000 home. Using a property tax rate of 1.25%, your taxes will be $3,750 annually, and $313 monthly. On the other hand, if your new home is in a 1.55% property tax area, these taxes will be $4,650 annually, and $388 monthly.

If your DTI is already close to the maximum allowable for a mortgage loan, the additional $75/mo. could very well push it over this amount and disqualify you from being able to get the loan. Consequently, after all of the time, expense, and effort you invested in searching for your dream home, you could find yourself in the middle of a nightmare because you were not advised properly by your loan officer. Your only alternative at that point is to start all over, preferably, with a new one.

The bottom line is this, be very selective about the loan officer you retain to do your mortgage loan. All loan officers are definitely not created equal, and you need to make sure the one you choose to work with fully understands the intricacies and nuances of mortgage loan structuring.