What Self-Employed Homebuyers Are Asking Google and ChatGPT in 2026

 What Buyers Are Really Asking...

"I write off everything. Can I still qualify for a mortgage?"

I hear this question almost every week. The answer surprises many business owners.

This week's Realtor update explores the biggest myths surrounding self-employed borrowers, along with practical solutions that can help more buyers qualify.

If you're working with self-employed clients, I'd be happy to review their situation before they begin house hunting.

Coming Next Friday: The biggest myths surrounding VA financing—and why some veterans mistakenly believe they can't buy a home today.

Karen Card | The Card Team

What Buyers Are Really Asking: Self-Employed Borrowers

Happy Friday!

Every week I spend time researching the questions buyers are asking Google and ChatGPT before they ever contact a Realtor or lender. My goal is to keep you informed about what your clients are thinking—and to help you answer their questions with confidence.

This Week's Focus: Self-Employed Borrowers

Self-employed buyers remain one of the most misunderstood groups in mortgage lending. Many successful business owners assume they won't qualify because their tax returns don't tell the whole story. In reality, today's lending programs offer more flexibility than many people realize.

Here are some of the questions borrowers are asking AI this week:

"I write off everything. Can I still qualify for a mortgage?"

Often, yes!

Traditional mortgage programs rely heavily on tax return income, but there are excellent alternatives available today, including bank statement loans and other documentation options designed specifically for self-employed borrowers. The rates are also much more competitive than many people expect.

"How many years do I need to be self-employed?"

Most conventional financing requires a two-year history of self-employment, although exceptions may exist depending on the borrower's overall profile. In my experience, five years of successful self-employment provides the strongest overall financing profile.  With five years most self-employeds only need to provide one year's taxes to qualify for a full document loan. Automated underwriting gives them a pass!

"My CPA minimizes my taxes. Will that hurt my mortgage approval?"

Sometimes—but not always.

This is why I encourage business owners to speak with both their CPA and lender before filing tax returns if they're considering buying a home in the next year. Sometimes a very small adjustment can make a significant difference in qualifying, with little or no impact on overall tax liability.

"Can I qualify using bank deposits instead of tax returns?"

Absolutely.

Many borrowers qualify using 12- or 24-month bank statement programs when traditional tax returns don't accurately reflect the true strength of their business.  And, there are other options for sefl-employed borrowers such as asset based financing;  combination of W2 plus assets or bank statements and more!  1099 loans are also common today with competitive rates.

Karen's Loan Desk

This week I spoke with a business owner who had already convinced himself he couldn't qualify because of extensive tax write-offs. After reviewing his financial picture, we identified an alternative documentation program that completely changed the conversation.

The takeaway? Never assume a self-employed borrower can't qualify until every financing option has been explored.

AI Prompt of the Week for Realtors

One of the best ways to use ChatGPT is to create personalized marketing that sounds natural and helpful. Here's a prompt you can copy and paste:

Act as a top-producing Orange County Realtor. Write a friendly email to a self-employed business owner explaining why they should speak with a mortgage professional before assuming they can't qualify for a home loan. Make the tone educational, conversational, and non-salesy. Include examples of common misconceptions about self-employed financing and end with a question that encourages the reader to respond. Keep it under 300 words.

Realtor Tip of the Week

Do you have a buyer who owns a business, works on commission, receives 1099 income, or has significant tax write-offs?

Let's have a conversation before they begin shopping for a home. A 15-minute strategy session upfront can often uncover financing opportunities that make all the difference.

As always, I'm happy to review any scenario, answer questions, or brainstorm financing solutions with you and your clients.

Have a wonderful weekend!

Karen Card
The Card Team
Certified Veteran Lending Specialist

Longer Days and Sunshine: It's Summer!

The longest day of the year is almost upon us. It's my favorite time of year—the sunshine, warm weather, and longer evenings spent outdoors. Of course, it's also the beginning of the gradual march toward shorter days. ☹

The kids are out of school and fully immersed in summer activities. My grandkids are keeping busy with everything from sailing, Junior Guards, and swimming to baseball camp, theater programs, and dance camps. Summer in Southern California really is a special time of year.  I'm keeping busy with home buyers and refiances, with a little vacation sprinkled in!  I'll update you next month....

RATE UPDATE

Mortgage rates have remained relatively stable over the past several months despite ongoing economic uncertainty. Inflation appears to be moderating, but global events, geopolitical tensions, energy prices, and government policy continue to create volatility in the financial markets.

While no one can accurately predict where rates will be six months from now, most analysts expect rates to remain within a relatively narrow range through the balance of the year. If you're considering purchasing a home or refinancing, it may make more sense to focus on whether the move benefits your financial goals rather than trying to perfectly time the market.

REAL ESTATE MARKET

The Orange County housing market appears to be moving toward a more balanced environment, with some areas beginning to favor buyers. Inventory has increased from the extremely low levels we've experienced over the past few years, giving buyers more choices and negotiating power.

We're seeing more sellers offer concessions, including interest rate buydowns, credits toward closing costs, repair allowances, and other incentives to help facilitate a sale.

While median home prices in Orange County remain strong, it's important to note that a significant number of luxury and multi-million-dollar transactions have helped support those statistics. In many neighborhoods, price appreciation has slowed and homes are taking a bit longer to sell than they did during the frenzy of recent years.

CREDIT SCORES & MORTGAGE QUALIFYING

Many consumers are surprised to learn there isn't just one credit score. Different industries use different scoring models. Auto lenders, credit card companies, insurance providers, and mortgage lenders may all evaluate credit differently.

The mortgage industry is preparing to transition to newer credit scoring models that may provide a more complete picture of a borrower's creditworthiness. This could be particularly helpful for borrowers who have limited traditional credit histories but have otherwise demonstrated responsible financial habits.

If you're curious about your credit profile or wondering how today's scoring models affect your ability to qualify, I'd be happy to review your situation.

HELOCs ARE MAKING A COMEBACK

We're helping more homeowners access their equity through Home Equity Lines of Credit (HELOCs). Homeowners today are sitting on record amounts of equity, and many are using HELOCs strategically for:

• Home improvements and renovations
• Debt consolidation
• Down payments on second homes or investment properties
• Educational expenses
• Emergency reserves and financial flexibility

A HELOC isn't right for everyone, but it can be an excellent financial tool when used appropriately.

CALIFORNIA INSURANCE UPDATE

Homeowners insurance continues to be a challenge throughout California. Many homeowners have experienced premium increases, policy non-renewals, or difficulty finding coverage altogether. Areas with wildfire exposure have been particularly affected, but the impact is being felt across much of the state.

The good news is that new insurance carriers are beginning to re-enter the California market, creating additional options for homeowners. While premiums remain higher than many of us would like, there are often alternatives available that can help reduce costs or improve coverage.

If you have questions about your current insurance situation, are purchasing a home, or simply want a second opinion on your coverage options, I have relationships with several excellent insurance professionals and would be happy to connect you with someone who can help.

SUMMER FUN ALONG THE COAST

Summer is officially in full swing along the Southern California coast. From outdoor concerts and movies in the park to festivals, farmers markets, harbor events, and beach activities, there's no shortage of things to do from Seal Beach to San Clemente.

If you're looking for ideas for family activities, date nights, local events, or hidden gems around Orange County, reach out. I'm always happy to share some of my favorites.

As always, thank you for your trust, referrals, and friendship. If you have questions about the market, mortgage financing, or your home's value, I'm just a phone call away.

Have a wonderful summer!

Karen Card

Coastal Updates, Market shifts and a Sailing Story

Spring has definitely arrived here in Southern California—and with it comes a mix of sunshine, shifting markets, and some pretty special moments around our local community.

I’ve got a little bit of everything for you this month… from real estate insights to life down at the harbor.

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What’s Happening in the Market?

If you’ve been watching the headlines, you know things are… evolving.

The big picture:

• Home prices are leveling off after the rapid appreciation we’ve seen over the past few years
• Mortgage rates have moved up again, keeping buyers a bit cautious
• Inventory is still relatively tight, but we’re seeing small increases in listings

What does that really mean in plain English?

• It’s a more balanced market
• Strategy matters more than ever (pricing, timing, financing)
• Opportunities are still there—you just have to know where to look

For buyers, this can actually be a window where there’s less competition.
For sellers, it means pricing correctly is key.

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🌟 Client Spotlight

One of my favorite parts of what I do is helping first-time buyers cross the finish line—and we just had a great win I wanted to share.

We recently closed on a purchase for a first-time homebuyer who bought a condo on a ground lease—which can sometimes add a few extra layers to navigate with the HOA and lease approval process.

There were definitely a few hoops to jump through, but with good communication and the right team in place, everything moved along smoothly…

• We closed on time
• The process stayed on track
•  And most importantly—one very happy new homeowner

These are the kinds of transactions that remind me how important it is to have the right guidance, especially when things aren’t totally “vanilla.”

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⛵ A Quick Trip South: Newport to Ensenada

We just got back from the Newport to Ensenada International Yacht Race—and what an experience it was this year!  We had ten boats from our harbor entered, and they all did well!

There’s something pretty incredible about leaving the California coast behind and heading into Ensenada with a fleet of boats, good friends, and just enough unpredictability to keep things interesting.

It’s one of those traditions that reminds you why we love living here—community, adventure, and a little salt air therapy.  

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🌴 Dana Point Local Highlights

State of the City at Dana Point Yacht Club

We recently hosted the Dana Point State of the City at DPYC, with over 300 people in attendance—an amazing turnout and such a great reflection of how engaged this community is.

One of the highlights was hearing from representatives of the Yuhaaviatam Nation, who recently completed the purchase of the Waldorf Astoria Monarch Beach Resort & Club.

This is a big moment for Dana Point, and it will be exciting to see how their stewardship shapes the future of one of our most iconic coastal properties.

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 Final Thoughts

This time of year always feels like a reset—longer days, more activity, and a sense that things are moving forward again.

Whether it’s real estate, community events, or just enjoying where we live, I feel incredibly grateful to be part of it all—and to stay connected with all of you.

If you need anything at all—advice, a second opinion, or just a quick question—I’m here.

Spring Into Action- April Market Update

Spring has officially arrived in Orange County — and honestly, can it get any better than this? The jacarandas are blooming, the ocean breeze is back, and whale-watching season is in full swing off Dana Point. If you haven't made it down to the harbor yet this spring, put it on your list. It does everyone some good.

I'm here with your monthly roundup of what's happening in the world of real estate and mortgage lending, and a few local goings-on you won't want to miss. Grab your coffee — let's dig in!

 WHAT'S HAPPENING WITH INTEREST RATES?

 

Here's the good news: rates are more settled than they've been in a while. As of this week, the conforming 30-year fixed is hovering right around 6.22–6.46% (depending on your loan type and lender), and the 15-year is sitting near 5.72–5.77%. VA loans are even sweeter — we're seeing 30-year VA rates around 5.90%.

Here's the context: after rates dipped below 6% briefly in February (I know — don't hate me for mentioning it), they bumped back up in March amid some geopolitical turbulence and a couple of stubborn economic reports. The Fed held rates steady at their March meeting and will meet again April 28–29. Most forecasters expect them to stay put for now.

The silver lining? Rates today are still lower than they were a year ago at this time (6.64% in April 2025). And experts are still forecasting a gradual drift downward as 2026 progresses — Fannie Mae is projecting rates could dip closer to 6% by year-end. Not a dramatic drop, but movement in the right direction.

Bottom line: buyers who've been on the sidelines waiting for rates to fall dramatically may want to reconsider. Rates in the mid-6s with the ability to refinance later is still a sound strategy — especially in a market where home values are holding strong.

ORANGE COUNTY REAL ESTATE: SPRING MARKET UPDATE

 

Spring selling season is officially here, and the OC market is showing some really interesting dynamics right now.

The median sale price in Orange County is sitting around $1.2 million — basically flat compared to this time last year, which actually tells a healthy story. We're not seeing the wild appreciation of 2021–2022, but we're also not seeing the corrections some predicted. Values are holding.

Inventory is slowly, steadily improving. Active listings are up about 11% year over year, and we've got around 2.5 months of inventory for detached single-family homes and 3.1 months for attached (condos and townhomes). That's still technically a seller's market for detached homes, but buyers have a little more breathing room than they did a year ago.

What does that mean practically? Well-priced, well-presented homes are still moving — and multiple offers are still happening on the right properties. Overpriced homes are sitting longer, and sellers who price to the market are winning. The days of "price it high and see" are over for now.

For buyers, this is actually a really decent window. More options, less frenzy, and sellers who are often more open to negotiating on terms — rate buydowns, closing costs, repairs. This is the market where having a great lender in your corner (ahem 😊) makes a real difference.

LOAN SPOTLIGHT: ARE YOU LEAVING MONEY ON THE TABLE?

 

A quick note for my realtor and financial planner friends — I've been having a lot of conversations lately about clients who simply don't know what programs are available to them. Here are three worth mentioning:

VA Loans: If you have a client who served — or whose spouse served — and they're not using their VA benefit, please send them my way. No down payment, no PMI, and today's VA rates are some of the best out there. It's one of the most underutilized benefits in the country.

Non-QM Lending: Self-employed clients, real estate investors, foreign nationals — traditional bank guidelines often don't work for them. Non-QM loans open doors that conventional lending closes. Bank statement loans, DSCR (Debt Service Coverage Ratio) loans for investors — I have great programs.

Reverse Mortgages: For clients 55+, the reverse mortgage has evolved. It's a legitimate financial planning tool — not the last resort it used to be perceived as. CPAs and financial advisors: let's talk about how this fits into a retirement income strategy for your clients.

SPRING IN ORANGE COUNTY — WHAT'S COMING UP

 

Because we don't just live here for the real estate — we live here because it's genuinely one of the most beautiful places on earth. Here are a few things happening this spring:

Newport to Ensenada Yacht Race (April 24–27): One of the oldest international yacht races in the world, departing from Newport Beach. Even if you're not racing, the send-off is spectacular to watch from the harbor.My husband is crewing on a Benetau and I will be taking the DPYC bus down to Ensenada to cheer them on!!

Whale Watching at Dana Point: We're smack in the middle of blue whale migration season — the largest animals on Earth are passing right by our coastline. Captain Dave's and the Dana Point Harbor have great seasonal tours.

Festival of Arts prep, Laguna Beach: The famous Pageant of the Masters and Festival of Arts kick off in July, but artist jurying and early season events are happening now. A great client gift idea, by the way — tickets go fast.

 

As always, I'm just a call or text away — whether you have a client with a tricky loan scenario, a question about rates, or just want to grab coffee and catch up. I truly love what I do, and I love the community of people I get to do it with.

Wishing you a beautiful April — get outside and enjoy that OC sunshine!

Warmly,

Karen and The Card Team

1031 Exchanges and Mortgage Strategy: What Your Investor Clients Need to Know

If you work with real estate investors — whether they're seasoned pros or just getting into their second or third property — you've likely had conversations about 1031 exchanges. It's one of the most powerful tax-deferral strategies available to real estate investors, and guidance on the tax side is invaluable.

 

But there's a piece of the puzzle that often gets overlooked until it's almost too late: the mortgage side. And that's where I come in. I want to share a few things I see come up regularly that I think are worth raising with your clients well in advance.

 

The Financing Timeline Problem

A 1031 exchange has strict IRS timelines — 45 days to identify a replacement property and 180 days to close. Those deadlines don't flex, and they don't care about appraisal delays, underwriting backlogs, or a lender who doesn't specialize in investment properties.

 

Where I see exchanges stumble isn't usually on the tax side — it's on the financing side. An investor finds their replacement property, has a solid 1031 in place, and then hits a snag getting the loan approved in time. Conventional lenders who aren't experienced with investment property transactions or who have slow turnarounds can put the entire exchange at risk.

 

The fix is simple: get the financing conversation started early — ideally before the relinquished property even hits the market. I can have a pre-approval ready and a loan strategy in place so that when the replacement property is identified, we're already prepared to move quickly.

 

Equity, Leverage, and the Mortgage Decision

Here's an area where the mortgage strategy and the tax strategy intersect in an interesting way: how much equity does your client want to roll versus how much leverage do they want to take on in the replacement property?

 

The IRS requires that the replacement property be of equal or greater value and that the investor reinvest all the equity to fully defer taxes. But "all the equity" doesn't mean they can't also finance a portion — it means they can't take any cash out of the exchange. A well-structured mortgage can actually allow an investor to acquire a higher-value property by adding debt on top of the rolled equity, which can make sense from both a tax-deferral and a portfolio-growth perspective.

 

This is worth walking through with your clients as part of the overall exchange planning — and I'm happy to be part of that conversation.

 

DSCR Loans for Investor Clients

One more thing worth mentioning: many of your investor clients may have robust real estate portfolios but show modest personal income on their tax returns — especially if they've done a good job of maximizing deductions. Traditional lenders can struggle to qualify them for additional investment property loans as a result.

 

DSCR (Debt Service Coverage Ratio) loans are a Non-QM product specifically designed for real estate investors. Qualification is based on the rental income of the property itself, not the borrower's personal income. If the property cash flows, the loan can be approved. This is a game-changer for investors looking to grow their portfolio without being penalized for smart tax planning.

 

Let's Work Together

The best outcomes for investor clients happen when the tax strategy and the mortgage strategy are coordinated from the start. I love working alongside CPAs and financial advisors to make sure nothing falls through the cracks — and frankly, my clients who have that kind of coordinated team tend to make better decisions and close more smoothly.

 

If you have a client planning a 1031 exchange or expanding their investment portfolio, I'd love to connect early in the process. Let's make sure the financing piece is buttoned up from day one.

Non-QM Loans - The Secret Weapon for Self-Employed Borrowers

If you work with entrepreneurs, freelancers, business owners, or independent contractors — and chances are you do — you've probably run into this scenario: your buyer is clearly successful, clearly has money, and clearly wants to buy. But when they go to get pre-approved, they hit a wall. Their tax returns don't tell the full story.

This is where Non-QM lending comes in, and it's something I think every great real estate agent should have in their toolkit of knowledge.

 

What Is Non-QM, Exactly?

"QM" stands for Qualified Mortgage — it's the standard set of underwriting rules that most conventional loans follow, largely governed by Fannie Mae and Freddie Mac guidelines. These guidelines rely heavily on W-2 income, tax returns, and traditional employment documentation.

 

Non-QM loans operate outside those guidelines. They're still fully legal, still held to responsible lending standards, but they use alternative methods to verify that a borrower can repay the loan. They're not "subprime" — that's an important distinction. These are well-underwritten loans for creditworthy borrowers who just don't fit the traditional mold.

 

Who Are These Loans For?

The self-employed buyer is the classic candidate — especially those who, quite smartly, write off a significant portion of their income for tax purposes. Their adjusted gross income on paper might look modest even if their business is thriving. Non-QM programs can use bank statements (typically 12–24 months) to reflect actual cash flow instead of what's on the tax return.

 

But self-employed isn't the only use case. Non-QM can also help with:

 

— Investors using rental income or DSCR (Debt Service Coverage Ratio) qualification rather than personal income

—  Borrowers with significant assets who qualify based on their liquid assets

 

— Borrowers with recent credit events (bankruptcy, foreclosure) who've re-established strong financial habits

 

— Foreign nationals or borrowers without traditional U.S. credit history

 

— High-net-worth buyers with significant assets but low reported income

 

What Does This Mean for You as a Realtor?

It means fewer deals falling apart at the pre-approval stage — and more clients you can actually take to closing. The self-employed buyer who got turned down somewhere else isn't necessarily unqualifiable. They may just need a lender who knows how to structure the loan correctly.

 

It also means you can be the agent who says, "I know the right person to call." That kind of referral confidence builds trust with your clients and separates you from agents who just hand out a generic lender list.

 

A Few Things to Know

Non-QM loans typically carry slightly higher rates than conventional loans — that's the tradeoff for the flexibility. But for many buyers, the difference is well worth it to get into a home now, especially if they can refinance into a conventional product later once their documented income picture improves.

 

The key is identifying these buyers early. The sooner we can get them in front of me for a conversation, the more options we have to work with.

 

Have a self-employed client who's been told "no" before? Let's talk before you let that deal slip away. I'd love to take a look and see what we can do.