Loans, Laws and Loopholes: What's New?

Welcome to your monthly roundup of must-know mortgage, tax, and real estate news. Whether you’re a homebuyer, investor, Realtor, or industry partner, these updates will help you stay informed—and ready to take advantage of current opportunities.

Rates are still hovering in the mid-to high-6's ++.  We won't see much improvement until we see inflation slow, a Fed move, or hints of recession.  Only time will tell! 

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 Student Loan Payments: New Rules Under the New Administration

The new administration has rolled out a fresh wave of changes to federal student loan repayment. Key points:

• Automatic Repayment Resumption: Most borrowers are back in active repayment, and many who were in forbearance are seeing their loans move toward collections.
• New Income-Driven Repayment (IDR) Programs offer potentially lower monthly payments.
• Borrowers struggling with delinquency should explore ombudsman services and federal assistance programs before their credit is impacted.  Ask us for help!!

Mortgage Tip: Student loan status directly impacts mortgage eligibility. We can help navigate options that may improve your debt-to-income ratio and credit profile.

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 Tax Law Updates: Mortgage & Property Impacts

Here’s what to know about current federal tax law changes and their effect on real estate:

🔹 Mortgage Interest Deduction

• The cap on deductible mortgage interest remains at $750,000 of qualified loan amount for those not grandfathered under older limits.
• Second homes still qualify—under specific conditions.

🔹 SALT Deduction (State and Local Taxes)

• The SALT deduction cap has been increased to $40,000, offering significant relief to homeowners in high-tax states like California and New York.
• This adjustment could improve tax outcomes for many homeowners and make certain high-cost markets more attractive.

🔹 Mortgage Insurance is Tax-Deductible

• Borrowers can now deduct Mortgage insurance premiums –including PMI, FHA MIP, VA funding fees and USDA guarantee fees… subject to income limits.
• This is a real win for any borrower putting down less than 20%!

🔹 1031 Exchange Watch

• No immediate changes—1031 exchanges remain a powerful tool for deferring capital gains on investment property sales.

 

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The Power of VA Loans: Benefits You Shouldn’t Miss

As a Certified Veteran Lending Specialist, I am proud to help Veterans, Active-Duty, and Reservists leverage one of the most powerful financing tools available:

• $0 Down Payment (yes, really!)
• No Monthly Mortgage Insurance
• Flexible Credit Requirements
• Assumable Loans (huge when selling in a high-rate market)
• Reusable Benefit – you can use your VA entitlement more than once

Even if you’ve used a VA loan before—or think you’re not eligible—it’s worth a conversation. We’ve helped countless Veterans get approved when others said no.

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💬 Let’s Connect

Got questions about the market, your current loan, or future plans? I’m always here to help clients, agents, and partners make informed, confident decisions.

 Karen Card
Mortgage Expert | Veteran Lending Specialist
Serving Orange County & Beyond

 

No Fireworks in the Real Estate Market

We had a fabulous fireworks show here in Dana Point on the 4th. I hope your 4th of July was wonderful!

This month’s newsletter includes critical financial updates, smart strategies to avoid capital gains, and a quick snapshot of our sluggish but shifting real estate market.

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🎓 Student Loans Are Back – And Causing Trouble
Federal student loan payments have fully resumed, and unfortunately, many borrowers are slipping into delinquency or even collections.
But there’s good news:
✔️ Repayment assistance programs are available
✔️ Income-driven repayment plans can ease the burden
✔️ The Student Loan Ombudsman is available to help resolve disputes or challenges with loan servicers

If you or someone you know is feeling overwhelmed, there are real solutions available before it impacts your credit — and your future homebuying power.  Please reach out to us for more information and assistance.

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🏘 Thinking About Selling an Investment Property? Avoid Capital Gains with a 1031 Exchange
A 1031 Exchange lets investors defer paying capital gains taxes by reinvesting proceeds from a sold property into another qualifying property.
It’s a powerful strategy, but it has strict timelines and requirements.

We’ve successfully guided many clients through 1031 exchanges — from timing coordination to working with accommodators. If you're even thinking of selling investment real estate, talk to us early. Planning ahead can save you big.

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📉 Market Snapshot – A Stalemate with a Silver Lining
The real estate market remains stuck in neutral. Inventory is tight, sellers are hesitant, and many buyers are waiting for a bigger rate drop.
That said, we are seeing mortgage rates tick slightly lower — and that can make a real difference in monthly payments and qualification power.

Want to see what today’s rates mean for you or your clients? Let’s run the numbers.

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 Client Spotlight

We recently closed a home purchase for a couple using VA financing.  We worked with this couple for well over a year as they carefully analyzed the market and made multiple offers.  Finally, on offer no. 5, their offer was accepted, and they are now the proud owners of their new home.  We used 100% financing-- so their only out of pocket expense was the closing costs for the purchase.   We love working with our veterans and thank them for their service.

 

As always, our team is here to guide, coach, and support you or your clients through every part of the lending and investment process.

Let’s make smart moves together,

Karen Card
Your Mortgage Maven 

 

What Happened to Buying Season?

 

Mid-Year Market Check-Up: What’s Ahead

Summer is here—and while the weather is (mostly) heating up, the real estate market feels cooler than usual. Traditionally a busy buying season, this year is seeing more homes on the market and motivated sellers, but fewer active buyers. That means: Pre-approved buyers are in the driver’s seat.

- Inventory is rising, offering more choice

- Negotiation power is shifting toward buyers

- Prices are holding steady (for now), but appreciation is slowing

- Interest rates remain around 7%, though there's buzz about potential cuts if inflation continues to ease

Thinking about buying or refinancing? Let’s connect and get you pre-approved—timing matters!

Buy Before You Sell – A Game-Changer Program

No more sale contingencies! We’re excited to offer a new HomeLight program that lets you buy your next home before selling your current one.

Here's how it works:

✔️ HomeLight goes under contract to buy your existing home

✔️ You get cash over the current loan amount up to 70% of your home’s value (or more) for your new down payment

✔️ You move into your new place stress-free

✔️ Your old home is listed and sold with your agent’s help

Move forward without looking back. Contact us for details on how this program can work for you!

Client Spotlight: 

Shana and Robyn bought their first home in 2021. They currently live there with their two girls, Poppy and Goldie. We asked them a few questions about their homeownership journey.

 
What do you enjoy most about your home?

We love having a home that feels like a 5th member of the family. Our children are growing up here and we already have so many memories of our girls running around the halls.

 
What do you wish you knew going into it?

We wish we knew that it’s easier than we thought it was to be homeowners. It felt like this monumental milestone that was for “other people”, but after going through it step by step, it’s absolutely achievable and so fulfilling. 

What does homeownership mean to you?

Homeownership gives us a deep sense of pride and belonging. We love puttering around our house and making it a fairytale background in what will hopefully be an idyllic childhood in our children’s memory. 

First-Time Buyer at 72!

Yes, it’s possible—and yes, we did it. We recently helped a 72-year-old first-time buyer qualify with a unique mix of income sources: pension, employment, social security, and Boarder income from his adult daughter. Thanks to HUD’s new guideline, we were able to use that rental income to qualify—and his loan was approved!

🙌 Sometimes the right loan just needs the right advocate.

Your Referrals Mean the World

Referrals from friends, family, and past clients are the heart of our business. Know someone who could use mortgage guidance and advocacy? Send them our way—we’ll take excellent care of them.

Stay Connected!

📱 Visit My Website

💬 Let’s chat anytime about your home financing goals.

📧 Email Me | ☎️ Call: 714-290-6940

🌞 Sunshine, Celebrations & Real Estate Insights!

 In the face of market uncertainty, let’s take a moment to focus on the positives this month:

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🌼 Spring is in Full Bloom!

The sun is shining, the flowers are blooming, and Dana Point is bursting with life. We’ve officially shaken off the winter blues!

🌮 Cinco de Mayo Celebrations

🎉 Join us Saturday at the Dana Point Yacht Club for a floating tequila cocktail contest—a spirited kickoff to May!

💐 Mother’s Day – Sunday, May 12th

A heartfelt reminder to honor the amazing mothers in our lives—our own, or those we admire and love in our community.

⚓ Opening Day at DPYC – Mid-May

Tradition, fun, and a little pomp and circumstance—Opening Day at the Dana Point Yacht Club is always a standout event.

🎶 Memorial Day Weekend – May 25–27

In Dana Point, Memorial Sunday brings a rock concert on the water with a fabulous local band—an unforgettable way to launch the summer!

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🏡 Real Estate Market Update

Interest rates continue their unpredictable climb—but we’re seeing slight improvement as of this writing. Properties are staying on the market a bit longer, yet sales remain brisk. Pent-up demand appears to be fueling continued activity.

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💼 Common Issues We Help Solve

📈 Investor Activity on the Rise

We’re working with a growing number of both first-time investors and those completing 1031 exchanges. A popular tool?  DSCR Loans (Debt Service Coverage Ratio) – which qualify borrowers based on property income instead of personal income. It’s much easier to navigate!

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💰 HELOCs, HELOANS & Reverse Seconds

Want to access your home equity without touching your low-rate first mortgage?

✅ Over 55? Ask us about the Reverse 2nd TD – no monthly payment required.
✅ We also offer traditional second loans with fixed monthly payments.

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🏠 Down Payment Assistance (DPA)

Think you need 20% down? Think again.
You might not even need 5%. If you qualify for the loan, we can match you with a DPA program to help get you into your next home—faster than you think!

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🏢 Condo Buying: What to Watch For

Condos add a layer of complexity due to HOA requirements. Beyond insurance issues, you may encounter:

• Insufficient reserves
• Delinquent HOA dues
• Pending litigation
• Special assessments

We provide thorough pre-purchase due diligence so our clients can close with confidence

 

RATES DROP AMID MARKET CHAOS!

Market Overview

As we move past March, the Orange County real estate market continues to show resilience amid fluctuating mortgage rates. Demand persists, keeping home values stable. However, notable changes in the broader financial landscape are starting to shake things up.

Rates have improved with the dramatic announcement of tariffs across all imported goods. The stock market does not like uncertainty, nor the specter of rising costs for all imports, and has spoken. This resulted in a flight to security, which means bond yields dropped as demand increased. As a result, mortgage rates have come down, with the average 30-year fixed rate currently at 6.6%.

What Does This Mean?
If you’ve been waiting for the right time to make a move, now might be it. Whether you're buying for the first time, moving up or down, or considering a refinance, it's time to start the process. We are seeing more inventory entering the market, but multiple offers are still common on well-priced homes.

Insurance Challenges
We continue to experience issues with home insurance, particularly for condominiums. Master HOA policies are struggling with wildfire coverage and have lost it altogether in some locations. Be cautious with condominium ownership and carefully review all HOA documentation, including insurance coverages and reserves.

CalFire released a new wildfire hazard map.  Your home may be impacted.  You can check it out here: https://osfm.fire.ca.gov/what-we-do/community-wildfire-preparedness-and-mitigation/fire-hazard-severity-zones?itid=lk_inline_enhanced-template  These areas will likely see further insurance premium increases.

VA Loan & Interest-Only Loan Insights
For veterans and active military, VA loans continue to offer significant advantages, including competitive rates and no down payment requirements. Additionally, interest-only loans remain an option for buyers seeking lower initial payments, particularly in high-cost areas like Orange County.

Looking Ahead
With economic volatility and shifting policy decisions, buyers and sellers should keep an eye on key indicators such as job growth, inflation, and lending guidelines. The Fed is currently holding firm on further rate drops, but that could change. If you're considering making a move, now may be the perfect time to lock in a favorable rate.

For personalized guidance, feel free to reach out!

 

Rates Drop and Tensions Rise

 RATE OUTLOOK

We continue to see market fluctuations influenced by the following:

• Inflation (pretty flat so far)
• Unemployment (low so far, but could rise with government layoffs)
• Monetary policy (no change by the Fed yet)
• Stock market gyrations and uncertainty (causing a flight to security)

What does that mean?  Whenever there is uncertainty there tends to be a move towards the most secure investment there is, currently U.S. Treasuries.  The demand causes prices of bonds to climb, resulting in lower yields (rates).  Most economic analysts expect rates to continue to experience volatility in the coming months, with the potential to rise if inflation does pick up due to tariffs.

INSURANCE

California continues to experience insurance woes…with the specter of increasing premiums for most homeowners due to pass-through of increased costs resulting from shoring up the Fair Plan.  State Farm continues to plead for an increase in excess of 20% for new policies.  So far, our insurance commissioner has not yielded. We are seeing more HOA Master Hazard policies with wildfire exclusions, or severe limitations.  This renders those homes un-lendable in most cases-- as the insurance does not meet traditional lending guidelines.

HOME VALUES AND MARKET ACTIVITY   

New home sales fell by 10% in January and it appears it was the slowest month for sales in general in the last in four years ++.  Many sales cancelled.  This is actually good news for buyers, which can lead to some softening in home prices.  Although homes continued to appreciate at pretty high rates last year (7% annually) they are going to slow down if inflation kicks back in and rates go up.  Nothing is going according to schedule at this point! 

TAX TIME

Income taxes are due April 15^th and Property taxes (2^nd Half) are due just before, on April 10^th.  However, if you are a victim of the recent fires in Los Angeles, you have until October 15th to file income taxes and you will qualify for relief for property taxes.  Let us know if you need any assistance for either of these items. 

You should have received a 1098 showing your mortgage interest paid for the year, which is a deduction, along with your Real Estate Taxes, up to a max of $10,000.  

However, there is talk of the new administration doing away with that cap on those deductions, which would be nice for California.  I’ve also heard whispers of an increase in the capital gains exclusion for homeowners of $250K per person upon sale of your primary residence.  One can only hope as we have built up so much equity in the last five years.

LOAN UPDATES – First Timers and Veterans

We love working with our veterans. There is no longer any loan limit for a VA loan which will go up to 100% of purchase price.  The Vet must qualify, but the guidelines are much more lenient than for any other loan programs. 

First time homebuyers are coming off the sidelines, and there are numerous programs out there to assist them.  For many who are paying high rent, saving for the down payment is difficult.  Don’t despair!  There are many down payment assistance programs available, and some don’t require payback.

 Please give us a call with questions, or for assistance.  Happy March!

 

FIRE FALLOUT & TARIFF WARS

 

FIRE SEASON

How to describe the pain and suffering, grief and loss surrounding the LA fires? 

Both my husband and I were born and raised in Los Angeles, and attended university in LA.  (cross-town rivals!)  We’ve both lived through fires in our neighborhoods but never had to face the loss of our home.  We are devastated. 

Insurance was already at a crisis state in California, and this will exacerbate the situation.  The three insurance companies-- with the most exposure in order of number of policies-- in Pacific Palisades and Altadena are:   State Farm, the FAIR plan and Farmers.  The Fair Plan, known as the insurer of last resort, has limited reserves such that they will need to be “augmented” by the rest of the California insurers per the setup of the plan.

The Fair plan also limited insurance coverage to $3 Million, so many of the  homes they insured in the Palisades are woefully underinsured.

How does all this shake out for the rest of the state?  All of our premiums will rise.  It will become more difficult to insure in many areas noted as fire-prone. This will render some areas as “uninsurable” and therefore unfinanceable.  Cash only.  Only time will tell exactly how it all plays out. But it is not good for anybody. 

TARIFF WARS

As I write this the tariffs have been temporarily stayed against Mexico and now Canada. The stock market reacted quite unfavorably due to the unknown consequences of the tariffs, and whether they might increase costs to businesses and individuals across the country, thereby increasing inflation.  

All this has had the result of keeping mortgage rates right about where they have been, hovering around 7%.  This is beginning to look like the new normal, and the reality is 7% is close to (maybe a tad over) the average mortgage rates of the last 30-40 years.  But that does not make it any easier for home buyers who are facing inflated home prices due to lack of inventory and continuing demand.

DEBT CONSOLIDATION

We are currently working with clients on refinances for debt consolidation using fixed rate 2^nd liens.  This protects their low-rate first mortgages until they are ready to move or refinance their first loans. 

We have access to a number of different programs for HELOANs (fixed) and HELOCS (floating) depending on specific needs and parameters of the borrower.

As always, call us with any questions you may have. 

WILL RATES EVER DROP?

MARKET OUTLOOK

As we step into 2025, mortgage rates remain a hot topic. Over a year has passed since the anticipated drop in rates, and while they dipped slightly earlier this year, they’re back to hovering around 7% as I write this. Factors like a strong economy, low unemployment, and uncertainty surrounding the new administration’s policies continue to fuel inflation concerns. Compounding this issue is the persistent lack of housing inventory.

While inventory has increased slightly, it’s still insufficient to curb the rise in home prices. The combination of elevated home prices and higher mortgage rates adds further pressure to inflation.

Looking ahead, rate predictions for 2025 vary widely, ranging from the low-to-mid 5% range to as high as 7%. Despite this uncertainty, we remain optimistic about potential rate declines and an increase in housing inventory, which could stabilize the market.

The Good and the Bad

Home prices continue to appreciate at a historically elevated pace, offering both opportunities and challenges for buyers and sellers.

TIME TO REFI?

While many homeowners currently enjoy rates lower than today’s levels, some may be grappling with consumer debt accumulated in recent years. With credit card rates climbing, tapping into the equity gained during the recent housing boom could be a smart move to consolidate and pay off high-interest debt.

HAPPY NEW YEAR TO ALL!

As we embark on 2025, don’t forget to set your goals and objectives for the year ahead.

Cheers!
Karen