The Election Is Over. Now What Happens to Mortgage Rates?

Rates, real estate opportunities, creative financing—and a little Thanksgiving gratitude.

Fall has certainly arrived in Orange County—but apparently Mother Nature hasn't quite made up her mind!

We started with a heat wave, unusually high tides and some impressive ocean swells. Then came a little rain on Halloween, followed by another dramatic return to warm weather and even more high tides. Never a dull moment along our coast!

Speaking of weather, Steve and I had planned a trip to the East Cape of Baja for some scuba diving and fishing. Unfortunately, the weather had other ideas, with nearby hurricane activity forcing us to change our plans.

We still had a wonderful time in La Paz. Steve caught plenty of dorado (mahi-mahi), and we enjoyed some terrific snorkeling, including quite a few sea turtle sightings. And the restaurants! Fabulous food everywhere we went.

But I missed the diving. Next time!

Now we're looking forward to Thanksgiving with family and friends—and I think we can all be thankful that the election is finally behind us, along with the seemingly endless requests for campaign contributions!

MORTGAGE RATES — NOW WHAT?

The election is over, but the uncertainty surrounding mortgage rates certainly isn't!

Rates enjoyed some improvement in recent weeks. Freddie Mac reported a national average of 7.18% for a 30-year fixed mortgage on November 5, down from 7.40% in mid-October.

Unfortunately, inflation continues to be stubborn, remaining above the Federal Reserve's 2% target. Strong consumer spending and a resilient economy are good news in many respects, but they can also make it more difficult for interest rates to move substantially lower.

And the latest inflation news has reminded us just how quickly the bond market can change direction.

So, what does this mean for homeowners and prospective buyers?

Don't make your real estate decisions based entirely on predictions about where interest rates might go next.

There are still opportunities in today's market, and sometimes the right financing strategy can make all the difference.

REAL ESTATE OPPORTUNITIES — BUY NOW OR WAIT?

Just today, I sat down with a business associate who asked me a question I hear almost every week:

"Should I buy now or wait?"

After reviewing his circumstances, I encouraged him to explore moving forward.

Our conversation centered on using a Home Equity Line of Credit (HELOC) on his current primary residence to help provide the down payment on his next home. He could then convert his existing residence to a rental property while purchasing the home he really wants.

Of course, we also need to consider the rental income, carrying costs, available equity and qualification requirements. But this is a great example of how the right financing strategy can create opportunities that aren't immediately obvious.

For buyers who qualify, the fall and winter months can also offer negotiating opportunities, particularly when sellers have been on the market for a while.

And remember, negotiating isn't always just about the purchase price.

Seller credits toward closing costs, interest-rate buydowns and other financing strategies can sometimes make a bigger difference to a buyer's monthly payment or cash needed to close than a simple price reduction.

My advice? Let's run the numbers before you decide to sit on the sidelines.

SELF-EMPLOYED? NOW IS THE TIME TO PLAN FOR 2027!

Here's my annual reminder to all my self-employed clients and friends.

If you're thinking about buying or refinancing real estate next year, please talk with me before your 2026 tax returns are finalized and filed.

Whenever possible, I like to review the financial picture with you and your CPA before filing. Sometimes a relatively small adjustment or correction in how income is documented can make the difference in qualifying for a traditional mortgage.

And if traditional tax-return income doesn't tell the whole story, we have a variety of alternative financing programs available, including bank-statement loans and other options for self-employed borrowers and real estate investors.

The key is planning ahead. Don't wait until after you've filed your returns to discover that your taxable income doesn't support the mortgage you want.

FROM KAREN'S DESK — A WIN-WIN FOR BUYER AND SELLER

I recently worked with a client who is purchasing the home he's currently renting.

Because the transaction is taking place directly between the buyer and seller, without Realtors involved, I had an opportunity to help both parties understand how best to structure the financing.

Rather than simply negotiating a lower purchase price, we explored using a seller credit toward the buyer's closing costs and interest-rate buydown.

The result? A financing structure designed to help the buyer obtain a more affordable mortgage payment while still allowing the seller to receive a price he considers fair.

A true WIN-WIN!

This is exactly why I enjoy what I do. Sometimes the best mortgage solution isn't the most obvious one. It's about looking at the entire transaction and finding a creative approach that works for everyone.

WHAT I'M THANKFUL FOR

As Thanksgiving approaches, I'm reminded how fortunate I am.

I'm blessed with wonderful friends, a loving family, and grandchildren who bring so much joy to my life.

I'm also grateful for the clients and real estate professionals who continue to place their trust in me.

After more than 30 years in the mortgage business, I still love the challenge of solving difficult financing puzzles. Every transaction is different, and finding a way to help someone accomplish their goals remains incredibly satisfying.

Happy clients are the icing on the cake!

Wishing you and your family a wonderful Thanksgiving filled with good food, laughter, friendship and gratitude.

Warmly,

Karen Card
Senior Loan Officer | The Card Team
American Pacific Mortgage Corporation
NMLS #235218
714-290-6940
kcard@apmortgage.com
www.card-team.com

Self-Employed and Planning to Buy a Home in 2027? Talk to Your Mortgage Professional Before Filing Your Taxes

 The election is behind us, and mortgage rates have been moving in a welcome direction.

The national average 30-year fixed mortgage rate declined to 7.18% on November 5, marking the third consecutive weekly decrease.  YAY Finally!

Will rates continue to decline? That's difficult to predict. Inflation, employment, economic policy and the bond market will all play a role.

But if you're self-employed and considering buying a home or refinancing next year, there's something you can do right now that may be more important than trying to predict mortgage rates.

Review your mortgage plans before making your final year-end tax decisions.

“I Write Everything Off. Can I Still Qualify for a Mortgage?”

This is one of the questions I hear most frequently from self-employed borrowers.

And the answer may surprise you.

Mortgage lenders don't necessarily calculate qualifying income the same way the IRS calculates taxable income.

Depending on your business structure and the applicable loan guidelines, certain expenses, including depreciation and amortization, may be added back when determining qualifying income.

We also look at business cash flow, income trends and whether your earnings are stable and likely to continue.

That means a borrower who reports relatively modest taxable income may have more qualifying income than they initially realize.

What If My Tax Returns Don't Show Enough Income?

Conventional financing isn't the only possibility.

Some alternative mortgage programs allow qualifying income to be evaluated using 12 or 24 months of bank statements, subject to program-specific calculations and requirements.

Other programs may consider substantial qualifying assets as a source of repayment ability.

The appropriate financing depends on your credit, down payment, assets, property type and overall financial situation.

Do I Need Two Years of Self-Employment?

Generally, lenders prefer a two-year history of self-employment.

However, certain conventional guidelines permit exceptions, including shorter self-employment histories supported by prior experience and, for some established businesses, documentation using only one year of tax returns.

These exceptions have specific requirements, so it's important to review your situation individually.

Why Year-End Planning Matters

Your CPA's job is to help you manage your taxes.

My job is to help you understand how your documented income, assets and debts affect mortgage qualification.

Both are important.

If you're planning to buy a home in 2027, coordinating these conversations before the end of 2026 may help you understand your financing options before your tax decisions are finalized.

I'm not suggesting that you give up legitimate deductions or pay unnecessary taxes.

I'm suggesting that you understand the mortgage implications before making decisions that could affect your future plans.

My Approach: Let's Look at the Whole Picture

After more than 30 years in mortgage lending, I've learned that self-employed borrowers often have more options than they think.

Sometimes conventional financing works beautifully. Sometimes a bank-statement program or another alternative is a better fit.

The key is understanding the borrower's complete financial picture.

Mortgage planning isn't just about finding a rate. It's about finding the financing structure that works for you.

If you're self-employed and thinking about buying a home or refinancing in California next year, let's have that conversation now.

Karen Card
Sr. Loan Officer | NMLS #235218
The Card Team | American Pacific Mortgage Corporation
714-290-6940
www.card-team.com

Are Adjustable-Rate Mortgages Making a Comback? Here is What Homebuyers Should Know

For years, adjustable-rate mortgages—or ARMs—weren't getting much attention. They became q uite unpopular and were considered "risky" post the Mortgage meltodwn of 2008 - 2010.  And then, with fixed mortgage rates at historically low levels, most borrowers had little reason to consider them.

But things have changed.

According to the Mortgage Bankers Association's October 28, 2026 report, adjustable-rate mortgages now account for 11.3% of mortgage applications, their highest share in more than a year.

Why?

Homebuyers are looking for ways to make their mortgage payments more affordable.

And depending on the loan program and borrower, an adjustable-rate mortgage may offer a lower initial interest rate than a traditional 30-year fixed mortgage.

But does that make an ARM the better choice?

Not necessarily.

How Does an Adjustable-Rate Mortgage Work?

Let's use a 7/6 ARM as an example.

The interest rate is fixed for the first seven years. After that, it can adjust every six months based on the loan's index, margin and adjustment limits.

Other common options include 5/6 and 10/6 ARMs, which provide initial fixed-rate periods of five or ten years.

The important distinction is that your rate isn't necessarily fixed for the entire 30-year loan term.

What Could the Initial Payment Difference Look Like?

Consider a hypothetical $750,000 mortgage:

	30-Year Fixed	7/6 ARM
Interest rate	7.00%	6.25%
Monthly principal & interest	$4,990	$4,618

That's approximately $372 per month in initial payment savings.

Of course, these are just illustrative rates rather than actual loan quotes. The comparison excludes taxes, insurance and other housing expenses, and doesn't account for differences in closing costs.

And remember: The ARM payment could change after the initial fixed period.

Who Might Consider an ARM?

An ARM may be worth exploring if you expect to sell or relocate before the initial fixed-rate period ends, want to compare initial payment savings, or have the financial flexibility to manage potential future increases.

But your plans can change.

You might decide to stay in the home longer than expected. Mortgage rates might not decline. And refinancing may not be available when you want it.

That's why it's important to understand the potential payment increases before committing.

What Should You Compare?

When evaluating an ARM against a fixed-rate mortgage, I want my clients to understand:

• The initial interest rate and monthly payment.

• How long the rate remains fixed.

• The index and margin used for future adjustments.

• The adjustment caps and maximum potential payment.

• The total financing costs and expected length of ownership.

An ARM may be a very useful financing tool. But it needs to fit your particular situation. How long will you stay in the home?  What is the future rate outlook?

My Approach: Let's Look at the Entire Picture

After more than 30 years in mortgage lending, I've learned that the best mortgage isn't always the one with the lowest initial rate.

It's the one that fits your financial circumstances, goals and tolerance for risk.

If you're considering buying a home in California, I'd be happy to compare fixed-rate and adjustable-rate financing options so you can make an informed decision.

Karen Card
Sr. Loan Officer | NMLS #235218
The Card Team | American Pacific Mortgage Corporation
714-290-6940
www.card-team.com

Should I Buy Now or Wait for Rates to Drop?

 It's one of the most common questions I hear from prospective homebuyers:

“Should I buy now, or wait until mortgage rates come down?”

It's a reasonable question. Buying a home is a major financial decision, and today's mortgage payments can feel daunting.

But here's something worth considering: The right time to buy isn't determined by the mortgage rate alone.

It's about the home price, the complete monthly payment, your financial stability, the cash you'll have left after closing, and how long you expect to own the property.

What If You Buy Now?

In some markets, buyers have more negotiating opportunities than they did when homes were selling with multiple offers and few concessions.

A seller might consider a lower purchase price, help with allowable closing costs, or provide a credit that can be used toward financing.

Sometimes a seller credit toward closing costs or a rate buydown may be more useful than a similar reduction in the purchase price.

But the answer depends on the buyer, the financing program and the transaction.

What If You Wait?

Waiting may be the right choice if you need more savings, want to reduce debt, expect a change in employment or simply aren't comfortable with the payment.

And yes, mortgage rates may be lower in the future.

But we don't know when, by how much, or what home prices and buyer competition will look like when that happens.

Waiting for lower rates doesn't guarantee a more affordable purchase.

What About Refinancing Later?

A future refinance may be an option if rates decline, but it should never be assumed.

Refinancing depends on your future financial qualifications, the property's value, available loan programs and the cost of the transaction.

I believe buyers should be comfortable with the financing they accept today—not depend on refinancing later to make the purchase affordable.

My Approach: Compare the Numbers Before You Decide

I like to show clients several scenarios:

• Purchasing now with today's financing.

• Purchasing with a negotiated seller concession.

• Waiting while saving more money or improving their financial position.

We'll look at the complete monthly housing expense, cash needed to close and the financial trade-offs of each choice.

Sometimes the numbers favor buying now. Sometimes they favor waiting.

My job isn't to convince someone to buy a house. My job is to show them the numbers so they can make an informed decision.

If you're considering a home purchase, I'd be happy to help you explore the possibilities.

Karen Card
Sr. Loan Officer | NMLS #235218
The Card Team | American Pacific Mortgage Corporation
714-290-6940
www.card-team.com

Self-Employed? Don't Assume You Don't Qualify!

 Happy Friday!

One of the questions consumers continue asking Google and AI is:

“I'm self-employed and take a lot of tax deductions. Can I still qualify to buy a home?”

The answer is often YES—but we need to look beyond the obvious.

I've worked with self-employed borrowers for more than 30 years, and one of the biggest misconceptions I encounter is that the income reported on a tax return tells the whole story.

It doesn't always.  And if it does, it can be complicated.

With conventional financing, we analyze the business income, expenses and cash flow. Certain noncash expenses, such as depreciation, may be added back when permitted by underwriting guidelines.  Also home office use, and a couple other items.

When conventional financing doesn't work, we may have other options:

• Bank-statement loans: Some programs use 12 or 24 months of personal or business deposits, adjusted for applicable expenses, rather than relying on tax-return income.

• Asset-based qualification: For buyers with substantial eligible assets, certain programs may allow us to use those assets to help establish qualifying income.  There are a variety of formulas that may be used.

• Non-QM financing: Alternative programs may include P&Ls or qualify based on rental income for an investment property.

Karen's Desk: The Tax Planning Conversation

Here's something I encourage self-employed clients to do: Talk to me before making major tax-planning decisions if purchasing or refinancing a home is on the horizon.

A perfectly legitimate tax strategy that minimizes taxable income may also reduce qualifying mortgage income.This is why collaberation with a Tax or legal professional is always encouraged.

I'm certainly not suggesting anyone pay more taxes than necessary! But coordinating with the borrower's tax adviser before the returns are filed can sometimes preserve more financing options.

Ask Karen

“My buyer has only been self-employed for one year. Should they wait another year before looking?”

Not necessarily!

Conventional guidelines generally look for a two-year history, but there are exceptions for borrowers with at least 12 months of documented self-employment and appropriate prior experience in the same field or occupation.

The important thing is to evaluate the entire situation before telling the buyer they need to wait.

Realtor Talking Point of the Week

When a prospective buyer says, “I'm self-employed, so I probably can't qualify,” try this:

“Don't rule yourself out! I work with a mortgage professional who specializes in self-employed borrowers. Let's have Karen look at your situation before we make assumptions.”

Sometimes the buyer needs a different loan program. Sometimes we need better documentation. And sometimes conventional financing works after all.

AI Prompt of the Week for Realtors

“Write a friendly, 150-word explanation for a self-employed prospective homebuyer who thinks they cannot qualify because of tax deductions. Explain that conventional and alternative mortgage programs evaluate income differently, avoid promising approval, and encourage a conversation with a mortgage professional experienced in self-employed financing.”

One Final Thought

A complicated tax return doesn't necessarily mean a complicated mortgage—or an impossible one.

If you have a self-employed buyer, I'd love to look at their situation early, before they get discouraged or decide to postpone their purchase.

Have a wonderful weekend!

Karen Card
Sr. Loan Officer | NMLS #235218
American Pacific Mortgage Corporation
714-290-6940
www.card-team.com

October — Fall Is Here…Even If Mortgage Rates Aren't Falling!

I haven't written much lately about travel and fun, but I've certainly managed to squeeze some in!

I recently spent four days in Bermuda Dunes celebrating a birthday at an amazing home complete with our own pickleball court, sand volleyball, ping pong and a swimming pool with a slide. Much fun was had playing pickleball and Mahjong!

Then it was off to San Diego to watch my grandchildren race their Sabots while their parents were off gallivanting around the world. San Diego Yacht Club is always a fun place to spend a weekend.

Next up is Cabo Pulmo for some scuba diving—one of our favorite dive destinations. We're hoping for lots of fish, maybe some sharks and, if we're really lucky, whale sharks! We'll finish in La Paz, staying at the marina while our friends from DPYC head out fishing. Hopefully they'll return with somthing good for dinner!

And now, back to real estate…

MORTGAGE RATES ARE OVER 7%. NOW WHAT?

Take it from me—the sky is not falling…but we sure wish interest rates would!

I've been in the mortgage business long enough to have seen just about every kind of market. Homes will continue to sell and buyers will continue to buy them. The numbers have changed, but that simply means we have to look at financing a little differently.

One option getting renewed attention is the Adjustable-Rate Mortgage, or ARM.

Before the Great Recession, ARMs were quite common. In fact, many of the loans I originated were 5-year ARMs. Why? Because many California homeowners didn't keep the same mortgage for decades. They moved, refinanced to access equity, or refinanced when better rates became available.

ARMs fell out of favor after the mortgage meltdown, along with many loan products that were considered risky. Today's ARMs, however, are not necessarily the same products borrowers may remember from that era.

With long-term fixed rates where they are today, ARMs are worth another look. They aren't as readily available as they once were, but I do have sources for them.

The important question isn't simply, “What's the lowest rate?” It's “Which loan structure makes the most sense for how long you expect to own the home and keep the mortgage?”

SELLER CREDITS — ONE OF MY FAVORITE STRATEGIES

One of my favorite moves is to have an offer accepted on a property and THEN, when appropriate, renegotiate the purchase price UP. Why on earth would we do that?

To generate a seller credit that can save the buyer a substantial amount of cash out of pocket.

For example, rather than purchasing a home for $1,000,000, we might restructure the transaction at $1,020,000 with a $20,000 seller credit toward allowable closing costs, prepaid expenses or a rate buydown. The seller's net can remain essentially the same, while the buyer gets $20,000 of real benefit toward the financing.

And here's something many buyers—and even some Realtors—don't realize: the appraisal does not necessarily have to come in at the increased purchase price.

The lender will base the loan on the applicable value under the loan program. If the buyer is making a large down payment, as one of my current clients is doing, there may be plenty of room for an appraisal below the contract price without changing the loan amount at all. With a smaller down payment, an appraisal below the contract price could require the buyer to bring some additional cash.

Of course, seller credits are subject to the limits and eligible uses of the particular loan program. That's why I like to get involved before the offer is structured—or immediately afterward.

Sometimes the best negotiation isn't getting the seller to lower the price. It's getting the seller to help solve the buyer's financing problem.

SELF-EMPLOYED? PLEASE TALK TO ME BEFORE YEAR-END!

If you're self-employed and think you may buy or refinance real estate next year, now is the time for us to talk—not after your tax returns have been filed.

Whenever possible, I like to review the financial picture with my self-employed clients before year-end and coordinate with their tax professional as appropriate. That gives us an opportunity to understand how their tax-return income may affect mortgage qualification before decisions become final.

And sometimes the answer isn't changing anything on the tax return at all.

We have a variety of financing options that may not require traditional tax-return income qualification, including bank-statement and other alternative-documentation programs.

The important part is pre-planning.

Please don't call me in April and say, “I just filed my taxes and now I'd like to buy a house.” 😊

Call me before year-end so we can look at the options first.

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FROM KAREN'S DESK — A REAL-LIFE SOLUTION

This month I worked with a client who wanted to pull cash out of a rental property to pay for remodeling and upgrades.

Both the rental and the client's primary residence were owned free and clear, so rather than automatically putting the new financing on the rental, we looked at the entire picture.

The better solution? A Home Equity Line of Credit (HELOC) on the primary residence, where we could obtain a lower rate than financing the investment property.

I also like using a line of credit for projects like this because remodeling expenses don't usually happen all at once. With a HELOC, the borrower can draw funds as the project progresses and pay interest only on the amount actually borrowed, subject to the terms of the line. Why borrow—and pay interest on—money you won't need for another six months?

Later, if it makes sense, we can evaluate converting or refinancing the outstanding balance into fixed-rate financing.

It's a good reminder that mortgage planning isn't just about finding a rate. It's about looking at the entire picture and finding the financing structure that works best for that particular client.

Should I ask for a Lower Home Price or a Seller Credit?

Happy Friday!

Every week I research the questions homeowners and buyers are asking Google and ChatGPT about home purchases, mortgages and the issues surrounding homeownership.

This week I want to turn that around and give you a question to ask me before you negotiate your next offer:

If the seller is willing to give $20,000, where should we put it?

Should a buyer negotiate $20,000 off the purchase price?

Or would they be better off keeping the price where it is and negotiating $20,000 toward their financing and closing costs?

The answer may surprise your buyer—and it definitely isn't the same for everyone.

A simple example

Suppose a buyer is purchasing an $800,000 home and the seller is willing to give up $20,000 to make the transaction happen.

Reducing the price to $780,000 sounds terrific. And depending upon the transaction, it may absolutely be the right choice.

But a $20,000 reduction in sales price doesn't translate into a $20,000 reduction in the loan. If the buyer is financing 80%, for example, the loan amount only decreases by about $16,000.

Depending upon the buyer's interest rate, that's likely a relatively modest reduction in the monthly principal-and-interest payment.

Now let's consider keeping the price at $800,000 and using some or all of that $20,000 as an allowable seller credit.

Depending on the loan program and the buyer's particular situation, that money could potentially help with:

• Closing costs and prepaid expenses
• Discount points for a permanent rate reduction
• A temporary interest-rate buydown
• Preserving some of the buyer's cash rather than using all of it at closing

Seller-paid financing concessions such as discount points and temporary buydowns are recognized under conventional guidelines, subject to applicable interested-party contribution limits and program requirements. 

The point isn't that the seller credit is always better. It isn't.

The point is that we should do the math before deciding how to negotiate the $20,000.

Karen's Desk

This is where I can really help before you write the offer or counteroffer.

Give me the purchase price, the amount the seller may be willing to concede and a little information about the buyer.

I can model the alternatives:

What happens if we reduce the price?
What happens if we use the money toward closing costs?
What happens if we use it toward the interest rate?
What happens if we structure a temporary buydown?
And which option leaves this particular buyer in the strongest position?

A few times I have had clients who were running short of cash to close.   Before the appraisal was performed, they went back to the seller and increased the price by the amount needed and then negotiated a seller credit FOR THE IDENTICAL AMOUNT--  which the buyer used toward all closing costs.  And, the proepty still appraised just fine, with the new higher purchase price.  The increase in the mnthly payment was minimal but it saved the deal.

Ask Karen

“Can we just ask for a huge seller credit and use whatever is left over?”

No. Seller contributions are subject to loan-program rules, and the allowable amount and permitted uses vary.

For example, FHA generally permits interested-party contributions up to 6% toward eligible borrower costs. HUD VA's rules are different: certain seller concessions are subject to a 4% limit, while some ordinary closing costs and discount points are treated differently under VA rules. Benefits Conventional financing has its own interested-party contribution requirements.

And importantly, a seller credit isn't simply cash the buyer gets to pocket at closing.

That's another reason to call me before putting the number into the contract.

Realtor Talking Point of the Week

When a seller is willing to negotiate, instead of automatically saying:

“Let's ask for another $20,000 off the price.”

Try:

“Before we decide how to use that $20,000, let's have Karen calculate which option gives you the greatest benefit. A price reduction, closing-cost credit or financing concession can affect your transaction very differently.”

That's a much more valuable conversation than simply negotiating price.

The takeaway

Don't just negotiate the price. Negotiate the transaction.

If you have a buyer getting ready to write an offer—or you're working a counter and there's money on the table—call me before you decide where to put it.

Sometimes a few minutes running the numbers can make that $20,000 work much harder for your buyer.

Have a wonderful weekend!

Karen Card
Sr. Loan Officer | NMLS #235218
The Card Team | American Pacific Mortgage
714-290-6940
www.card-team.com