When it comes to mortgage rates, you might wonder how much influence the Federal Reserve really has. While the Fed doesn’t directly set mortgage rates, its decisions significantly impact the borrowing environment for homeowners. Recently, the Fed chose to maintain its benchmark interest rate at 4.25–4.5 percent, signaling stability after several changes throughout 2024. This decision encourages lenders to keep mortgage rates relatively steady, which can offer some comfort to potential homebuyers.

Mortgage rates mainly track the yield on the 10-year Treasury bond rather than the Fed’s rate directly. When the Fed keeps rates unchanged, it can reassure bond markets, often leading to slightly lower Treasury yields and, consequently, more affordable mortgages. For instance, after the Fed’s recent announcement, the bond market responded positively, lowering the 10-year Treasury yield. This is great news if you’re considering buying a home soon, as it can mean lower monthly mortgage payments.

Adjustable-rate mortgages (ARMs) are a bit more sensitive to Fed decisions. The interest rates on ARMs often follow financial benchmarks like the Secured Overnight Financing Rate (SOFR), which the Fed influences more directly. So, if the Fed decides to raise or lower its benchmark rate, ARM borrowers will typically see their interest rates adjust accordingly at their next reset period.

Ultimately, while the Federal Reserve’s actions set the stage, several other factors also influence mortgage rates—including inflation, the demand for mortgages, and investor interest in mortgage-backed securities. To secure the best mortgage rate, maintain a strong credit score, reduce your debt, save up for a sizable down payment, and always compare loan offers by looking closely at the APR, not just the advertised interest rate. Doing this ensures you’ll get the best possible deal, no matter what the Fed decides next.

Inheriting a home with an outstanding mortgage can be a springboard to new opportunities rather than a source of anxiety. By gathering the loan statements, confirming the servicer’s details, and keeping payments current, you safeguard the property while the estate is settled and gain precious time to weigh your best options. Reviewing the loan’s balance, interest rate, and payment schedule—ideally alongside an estate-planning attorney—equips you with clarity and confidence, ensuring the process stays smooth and compliant with state-specific rules.

Armed with the numbers, heirs can choose a path that turns the property into an asset. Thanks to federal protections, relatives who wish to live in—or rent out—the home can assume the loan without triggering a costly due-on-sale clause. If several heirs are involved, one party can finance a buy-out (via a probate loan or cash-out refinance) so everyone benefits fairly. Alternatively, selling the property often yields a “step-up” in tax basis, letting your clients capture equity with little or no capital-gains liability—cash that can fund new dreams, investments, or charitable gifts.

Even homes covered by a reverse mortgage come with encouraging solutions. Lenders provide a six-month window—extendable up to a year—to repay the balance through refinancing, a 95 percent value sale, or a deed-in-lieu that erases remaining debt. Throughout that period, maintaining taxes, insurance, and basic upkeep not only preserves the property’s value but also keeps every option open. When handled proactively, heirs can transform what feels like a ticking clock into a flexible timeline for smart financial decisions.

Finally, an “underwater” mortgage doesn’t have to sink your plans. Many reverse and other non-recourse loans limit the lender’s remedy to the property itself, paving the way for a strategic short sale or deed-in-lieu that protects personal assets. And if no will exists, swift legal guidance ensures the right heirs are recognized and empowered. By partnering with an experienced mortgage professional early, families convert a potentially stressful inheritance into a positive, wealth-building milestone—fulfilling the loved one’s legacy while opening doors to their own bright future.

Many people assume that once you retire, your chance to qualify for a mortgage disappears—but that’s not the case. Thanks to fair lending laws, age cannot legally be used against you when applying for a home loan. Whether you’re downsizing, helping a family member, or relocating for lifestyle or tax reasons, it’s absolutely possible to get approved for a mortgage later in life. What matters most is your financial profile—your income, credit, debt-to-income ratio, and assets.

Understanding the Challenges Older Borrowers May Face

While lenders cannot reject your application based on age, retirees may face some practical hurdles. Often, fixed incomes or distributions from retirement accounts can make it harder to meet traditional income requirements. Additionally, existing mortgage debt or high monthly obligations can increase your debt-to-income ratio, which lenders weigh heavily when evaluating your application. That said, retirees who maintain strong credit and manage debt wisely are still well-positioned to qualify.

What You Need to Qualify

Lenders review the same criteria for all applicants: credit score, income verification, and debt obligations. Retirees can qualify using Social Security, pension, investment, or rental income—provided the documentation supports it. Most lenders want to see at least two months of consistent bank deposits and may “gross up” nontaxable income by as much as 25% to improve your chances of qualifying. A good credit score and sufficient home equity can also help you access lower rates or different loan options, such as conventional, FHA, or even reverse mortgages.

Smart Lending Options for Older Adults

If you’re in or nearing retirement, consider your long-term financial goals before taking on a mortgage. For some, a shorter loan term with a higher monthly payment may be a better fit. Others may benefit from tapping into home equity through a HELOC or reverse mortgage. The key is choosing a financing solution that fits your income, lifestyle, and legacy goals. Of course check with us if you’d like more information and we can see what fits your specific needs!

familiar with private mortgage insurance (PMI). This insurance is typically required by lenders to protect themselves in case a borrower defaults. For a few recent tax years, homeowners had the opportunity to deduct PMI premiums on their federal returns, offering some relief on their overall tax burden. However, that deduction expired after the 2021 tax year, and currently, PMI is no longer tax-deductible.

Between 2018 and 2021, eligible homeowners who itemized their deductions could write off PMI premiums. This was a welcome break for many, especially those paying hundreds annually in PMI costs. If you didn’t take advantage of the deduction during those years, there’s still a chance: you may be able to file an amended return and claim those missed deductions. Just keep in mind that your mortgage must have originated (or been refinanced) on or after January 1, 2007, to qualify.

So, where does that leave us now? As of the 2022 tax year and beyond, the PMI deduction is no longer available. A new bill has been introduced in Congress to potentially reinstate it, but until it’s passed and signed into law, homeowners should plan their taxes accordingly. This change highlights the importance of staying up to date with tax law changes, especially if you’re navigating homeownership with a tight budget.

While the expired deduction may not have been a game-changer for everyone, it could have still saved you a few hundred dollars a year—money that adds up over time. If you’re unsure whether you missed out on this deduction in previous years or want to know if an amended return makes sense, it’s worth speaking with a tax professional or schedule a review with us on our website and we can help you decide.

Buying a home is often a team effort, whether it’s with family, friends, or business partners. A common question among potential homebuyers is how many people can join forces on a mortgage. Although there’s technically no legal limit, most lenders typically allow up to four borrowers on a conventional mortgage. This limitation usually comes down to underwriting software, which comfortably accommodates up to four borrowers without requiring manual handling.

Applying for a mortgage with co-borrowers offers several great benefits. It can make qualifying for a loan easier, as combined incomes and credit scores often increase your buying power and help secure more favorable mortgage terms. Plus, sharing costs makes homeownership more affordable and accessible. This arrangement works especially well for multi-generational households, co-living setups, or friends investing together.

However, having multiple borrowers can come with some challenges. Each borrower is fully responsible for paying back the loan. If one person struggles to contribute their share, the others need to cover the shortfall to avoid damaging their credit or facing foreclosure. Joint homeownership also involves shared decision-making, which can become tricky if co-owners disagree on maintenance, upgrades, or selling the property.

If you’re thinking about buying a home with others, it’s important to be prepared. Check with us of course, if you are in a situation similar to this and we may recommend chatting with a real estate attorney about the best legal structure for your situation, like an LLC or a partnership, which can protect everyone involved and clarify roles.

Refinancing a second home or investment property can be a smart financial move, but it’s essential to understand the process and requirements before making a decision. Homeowners and investors refinance for various reasons, such as securing a lower interest rate, reducing monthly payments, or accessing equity through a cash-out refinance. However, refinancing a second home or rental property comes with additional considerations compared to refinancing a primary residence. Lenders impose stricter qualification requirements, including higher credit score thresholds, lower loan-to-value (LTV) limits, and additional cash reserves.

One of the most common reasons to refinance a second home or investment property is to take advantage of lower interest rates or change the loan term. If your credit score has improved since you originally obtained your mortgage, you may qualify for a more competitive rate. Borrowers may also opt to refinance from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage for greater stability in payments. For those with multiple mortgages, consolidating loans into one can simplify finances. Additionally, a cash-out refinance allows property owners to tap into their home’s equity to fund renovations, purchase additional properties, or cover other significant expenses.

The refinancing process for a second home involves choosing between a rate-and-term refinance or a cash-out refinance. A rate-and-term refinance replaces your current mortgage with a new one that has a different interest rate or loan term, potentially lowering monthly payments. Meanwhile, a cash-out refinance provides homeowners with a lump sum by replacing their mortgage with a larger loan, with the difference paid out in cash. Before refinancing, ensure you meet lender qualifications, including a sufficient credit score, stable income, and adequate cash reserves. Most lenders require a minimum of 20% equity in a second home or investment property and may limit cash-out amounts to 80% of the home’s value.

Refinancing a second home or investment property differs from refinancing a primary residence in a few key ways. Because lenders consider second homes and rental properties riskier, interest rates tend to be slightly higher, and eligibility requirements are stricter. Some lenders may also have more limited options for investment property loans. To maximize your savings, shop around and obtain at least three refinance quotes to compare rates and fees. Understanding these differences and being prepared with the necessary financial documentation can help streamline the process and ensure you secure the best refinance deal for your second home or investment property.

Saving for a down payment can sometimes feel like a constant uphill climb. Between rising home prices, elevated interest rates, and everyday financial demands, it’s easy to see why many would-be buyers feel stuck. Even with careful budgeting, unexpected costs and competing priorities can easily derail the goal of buying a home. The good news is that with a few strategic moves, you can get back on track and make homeownership a reality sooner than you might think.

One of the main roadblocks for many first-time buyers is simply keeping up with everyday expenses while trying to stash extra cash for a future house. Rents have climbed steadily in recent years, and credit card debt continues to be a burden for many households. On top of that, grocery bills, gas prices and other routine costs haven’t shown much sign of slowing down. All these factors can eat away at your income, leaving less to set aside in your savings.

Additionally, big-picture economic factors like inflation and student loan payments can squeeze your budget even further. When prices are climbing faster than paychecks, it’s only natural to focus on pressing needs before a future purchase. However, consistently putting off that down payment goal can delay your plans by months or even years. The key is to tackle these challenges step by step: carefully manage high-interest debts, create a realistic monthly budget, and look for ways to trim expenses or boost your income.

If homeownership is your goal, it’s worth exploring every strategy available. Consider opening a high-yield savings account or a certificate of deposit (CD) for your house fund, so you can earn more interest while you save. Investigate assistance programs that might be offered by your state, your local housing agency or certain nonprofits. And if you’re fortunate enough to have a relative who’s willing to help, a financial gift can make a meaningful difference. With a bit of planning, discipline and resourcefulness, you can sidestep the biggest pitfalls and make steady progress toward that down payment. After all, no matter how tough it gets, every dollar you save brings you one step closer to unlocking the door to your new home.

Mortgage rates edged lower recently, with the average 30-year fixed rate now hovering around 6.84 percent—down from around 7.0 percent just a short time ago. This slight drop marks one of the lowest levels seen in recent months, creating an opportune moment for buyers and those looking to refinance. At the same time, many lenders report that the average discount and origination points remain relatively manageable, offering further incentives for prospective borrowers to explore their options.

For a typical family making the national median income of around \$97,800 and purchasing a home at the median price of \$396,900, the monthly mortgage payment on a 30-year fixed rate of 6.84 percent (with a 20 percent down payment) comes in around \$2,078. That equates to roughly 25 percent of the household’s monthly income. While this figure can vary based on local property taxes and insurance costs, it provides a helpful snapshot of affordability in the current market.

Looking ahead, mortgage rates tend to respond more closely to investor behavior and broader economic factors, such as inflation, rather than directly to central bank rate decisions. With inflation still running above the ideal target, uncertainty in financial markets and the global economy could continue to drive rate fluctuations. However, if price pressures ease and investor confidence stabilizes, there’s potential for mortgage rates to hold steady or even move lower in the coming months—offering a window of opportunity for buyers and homeowners seeking the best possible financing.

A balloon mortgage is a unique type of non-qualified (non-QM) home loan that offers lower monthly payments upfront but requires a large lump sum—known as a balloon payment—at the end of the loan term. Typically structured for five, seven, or ten years, balloon mortgages are appealing for those looking for short-term affordability. However, they also come with risks, including higher interest rates and the potential for financial strain if the borrower cannot afford the final payment. Since these loans don’t conform to the Consumer Financial Protection Bureau’s standards for a qualified mortgage, they are less common and often come with more flexible application requirements.

How Does a Balloon Mortgage Work?
Unlike traditional mortgages, balloon loans can have different payment structures depending on the lender. Some loans require both principal and interest payments calculated over a 15- or 30-year period, with the remaining balance due at the end of the term. Others may be interest-only, where borrowers make smaller monthly payments covering just the interest, leaving the full principal to be paid as the final lump sum. In rare cases, some balloon mortgages require no payments at all during the loan term, meaning the borrower must pay the entire principal and interest in one large final payment. Because of this structure, these loans are best suited for those with a clear financial plan to cover the final payment.

Managing a Balloon Mortgage Payment
When the balloon payment is due, borrowers generally have three options. The most straightforward is to pay the lump sum in full, but this requires significant financial resources. Another option is to refinance the mortgage, replacing it with a new loan—though approval for refinancing depends on factors like home equity and credit standing. Lastly, some borrowers choose to sell the home before the balloon payment is due, using the proceeds to cover the remaining balance. However, selling isn’t always a guaranteed solution, as market conditions can impact home values and the ability to find a buyer in time.

Is a Balloon Mortgage Right for You?
Balloon mortgages aren’t for everyone, but they can be beneficial for real estate investors, house flippers, or buyers who plan to sell or refinance before the balloon payment is due. Some sellers also offer balloon mortgages as owner financing for buyers who may not qualify for a traditional loan. While these loans provide flexibility and lower initial payments, they carry substantial risk if a borrower cannot secure funds for the final payment. If you are thinking about a balloon mortgage schedule a consultation on our website and we can see if its right for you!

No-doc loans (short for “no documentation” loans) can sound like a dream come true for borrowers who want to avoid the usual hassle of paperwork. Unlike traditional mortgages, which require reams of income and asset statements, pay stubs, and tax returns, no-doc loans promise a more streamlined process. But as easy as they might sound, these types of mortgages come with unique requirements, higher risks, and often steeper interest rates.

In a typical mortgage application, lenders scrutinize everything from your credit score to your debt-to-income ratio (DTI) and employment history. With a no-doc loan, the name says it all: You’re not asked to provide detailed paperwork to prove your income. Instead, you generally just state what you earn — though be aware, lenders still run credit checks and require some form of verification to reduce their risk. Because the lender is taking on more uncertainty, you can expect higher credit score thresholds and larger down payment demands in many cases.

These loans are popular among certain self-employed individuals, entrepreneurs, or those who might have complex finances that are difficult to document. If you have funds coming from multiple sources — or if you’ve gone through events like a bankruptcy in the recent past and your financial statements don’t paint the whole picture — a no-doc loan could be an option. However, it’s crucial to understand that just because you don’t supply the usual paperwork doesn’t mean you’re free of the usual mortgage obligations. You’ll still need to meet monthly payments, and if your lender perceives you as a bigger risk, you may pay a premium via a higher interest rate.

Before deciding on a no-doc loan, weigh the pros and cons. On the plus side, you skip the typical documentation hurdles and may be able to close more quickly. On the downside, you’ll likely need a hefty down payment, solid credit, and a willingness to pay a higher interest rate. Of course check with us to see if a no doc loan is the best prescription for you.