Imagine finding a home you love and discovering something potentially even better than the house itself: the seller financed it several years ago with a mortgage rate in the 2% or 3% range. Your first question would probably be the same one I hear from buyers: “Can I just take over their mortgage?” Sometimes, the answer is yes. Certain mortgages are assumable, which means an eligible buyer may be able to take over the seller's existing mortgage obligation rather than obta

One of the strangest problems in mortgage lending happens when someone is objectively wealthy but looks weak under traditional income underwriting. They may have $1 million, $2 million or considerably more sitting in investment and retirement accounts, own other properties outright, and have very little debt. Yet when they apply for a traditional mortgage, they can still hear the words: “You don't have enough qualifying income.” That sounds ridiculous until you understand h

One of the strangest conversations I have in mortgage lending is with successful business owners who are convinced they can't qualify for a home loan. Their company is profitable, they have money in the bank, their credit is strong, and they may have been self-employed for years. Yet when their income is analyzed through traditional mortgage guidelines, the numbers suddenly don't look nearly as impressive. This doesn't necessarily mean the business owner can't afford the hous

Mortgage markets received several pieces of encouraging economic news this week, but there is still one major obstacle preventing interest rates from moving significantly lower. Inflation, employment and consumer spending are all beginning to show signs of cooling. July's Producer Price Index was unchanged for the month, coming in below expectations. Core wholesale inflation was also softer than forecast. The labor market is showing weakness as well. July payrolls declined by

One of the most common negotiations in real estate sounds incredibly simple. A buyer likes a house, but they think it's overpriced. The seller is willing to negotiate, so the buyer asks for $10,000, $20,000 or $30,000 off the purchase price. That feels like the obvious move. After all, paying less for the house has to be better, right? Not necessarily. Depending on the buyer's financing, the seller's willingness to negotiate, the appraisal and the buyer's financial goals,

Here's one of the strangest problems in real estate. You can have hundreds of thousands—or even millions—of dollars in home equity... And still feel broke when you find the house you want to buy. Why? Because equity isn't cash. You can't walk into escrow and say: “Don't worry. There's $600,000 sitting inside my house.” Escrow is going to want actual funds. And that's where move-up buyers get stuck. They have the wealth. They have the income. They've found the house. But a hug

If You Have a 3% Mortgage, Think Twice Before Doing a Cash-Out Refinance There are homeowners all over America sitting on an interesting financial problem. They have a mortgage they absolutely love. And equity they would really like to use. Maybe they bought or refinanced when mortgage rates were extraordinarily low. Their first mortgage might be somewhere in the 2s, 3s or 4s. But life didn't freeze when they locked that rate. The kitchen still needs remodeling.

There's a phrase in mortgage lending that drives me absolutely crazy: "That building can't be financed." Can't? Or couldn't? Because those are two very different things. I've been doing mortgages long enough to know that once a condo project gets a reputation for being "unfinanceable," that reputation can stick around for years. A buyer asks the listing agent. The listing agent heard something from another agent. That agent remembers a transaction that fell apart eighteen mon

There are two houses for sale. Same neighborhood. Similar square footage. Similar lot. Same school district. One has white-oak floors, a remodeled kitchen, new bathrooms, perfect landscaping and professional photos taken at sunset. The other looks like someone stopped caring about it around 1997. Which one gets everybody's attention? Obviously, the remodeled house. And that's exactly the problem. You're Not the Only Person Who Likes the Pretty House Real estate buyers aren't

Mortgage rates received some welcome help Friday morning after the latest employment report came in much weaker than expected. The headline number was surprising. The U.S. economy lost 23,000 jobs in July when economists had expected roughly 80,000 jobs to be added. Previous months were also revised lower by more than 100,000 jobs combined. That immediately changed the market’s view of the Federal Reserve. Why Weak Jobs Can Help Mortgage Rates The Federal Reserve has been con

For years I've heard the same sentence. "I'd love to buy in San Francisco...but I can't afford it." Sometimes that's true. But sometimes the buyer simply hasn't been introduced to one of the Bay Area's best-kept secrets: TIC ownership. No... It's not a timeshare. No... It's not fractional vacation ownership. And no... It isn't a loophole. It's simply another form of homeownership that has existed in San Francisco for decades. Yet most buyers—and even m

One of the strangest conversations I have every month goes something like this: "My CPA said I qualify." Maybe. Maybe not. CPAs are phenomenal at reducing taxes. Mortgage underwriting is an entirely different discipline. Those two worlds overlap—but they aren't the same. One professional is trying to legally reduce taxable income. The other has to document qualifying income using lending guidelines. That's why successful business owners sometimes hear the most frustrating sen

If you're self-employed, you've probably heard this before: "I don't make enough on paper to qualify." But here's the question I ask: Does your tax return actually reflect your business? For many entrepreneurs, the answer is no. Tax returns are designed to report taxable income. They're not always the best representation of a successful business. The Difference Between Taxable Income and Cash Flow Business owners often deduct legitimate business expenses to re

Every year I meet successful business owners who tell me exactly the same thing. " My business is doing great...but I don't qualify." Usually... The problem isn't income. The problem is what's left after the tax return is finished. Your CPA Isn't Wrong Let's get something straight. Your CPA is doing exactly what you hired them to do. Reduce your tax liability. That's smart. But qualifying for a mortgage uses many of those same tax returns to determine income. When taxable inc

Every year, I have conversations with business owners who are frustrated. Not because they don't make enough money. Because on paper... It looks like they don't. If you're self-employed, you've probably heard this advice before: "Write off everything you legally can." For taxes, that often makes perfect sense. For qualifying for a traditional mortgage? Sometimes it creates a completely different problem. Why Traditional Mortgage Guidelines Can Work Against B

The Fed Is Divided — What That Means for Mortgage Rates Mortgage rates came under renewed pressure this week as investors reacted to higher oil prices, continued inflation concerns, and disagreement inside the Federal Reserve. The Fed voted to leave its policy rate unchanged, but two officials dissented and argued for a quarter-point increase. That is significant. It tells us that some policymakers believe inflation remains too high and may not return to the Fed’s 2%

One of the biggest mistakes I see buyers make has nothing to do with credit scores, down payments, or interest rates. It starts much earlier. They begin touring homes before they know exactly what they can afford. It seems harmless at first. Until they find "the one." Then reality sets in. The payment is different than expected. The loan program doesn't fit. Or another buyer—who was fully prepared—gets the home instead. A Pre-Approval Is More Than a Budget

One of the biggest misconceptions in real estate is that waiting is a neutral decision. It isn't. Waiting is still a strategy. Like any strategy, it comes with potential benefits and potential costs. The key is understanding both before making a decision. Everyone Focuses on Interest Rates When buyers talk about waiting, they're usually focused on one thing: "I'll buy when rates come down." That makes sense. Lower rates can improve affordability. But inter

If you've been thinking about buying a home, you've probably asked yourself one question: "Should I wait until interest rates come down?" It's one of the most common conversations I have with buyers. And while it's a great question, the answer isn't the same for everyone. The better question is: What happens if you wait? You Can Refinance a Loan Interest rates change over time. If rates move lower in the future and you qualify, refinancing may be an option.

When most buyers make an offer, they focus on one number: The purchase price. While the purchase price is important, it isn't always the number that has the biggest impact on your day-to-day finances. Your monthly payment is what you'll live with every month—not the negotiated purchase price. The Question Most Buyers Never Ask Imagine two offers: Offer A saves $20,000 on the purchase price. Offer B uses that negotiating power to secure a seller credit that permanently reduces