Your 70-Year-Old Homeowner May Also Be Your Next Buyer!

Happy Friday!

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

This week, I'm seeing a lot of questions involving senior homeowners, reverse mortgages and what happens to the family home when a parent passes away.

Questions like:

“Mom has a reverse mortgage. What happens to the house when she dies?”

“Can we inherit the house?”  “Can we keep it?”  “What happens to the equity?”

“Does the bank own the house?”

But there's another side of this conversation that Realtors shouldn't overlook:

Your 70-year-old homeowner may not just be your next listing. They may also be your next BUYER!

Many of our senior homeowners are sitting on substantial equity in homes that no longer fit their lives.

Maybe the house is too large. There are too many stairs. The yard has become a burden. They want to move closer to their children or grandchildren. Or perhaps they'd simply like a smaller home that better fits the next chapter of their lives.

The obvious assumption is:  “They'll sell and pay cash for the next house.”

But that isn't necessarily their only option.

Reverse Loans for Purchase

A reverse loan will allow an eligible homeowner age 55 or older to purchase a new primary residence using a combination of their own funds and a reverse mortgage—in a single transaction.

That can allow the homeowner to retain more of the proceeds from the sale of the previous home rather than putting all of that cash into the next property.  This provides them with additional savings for the future.

And there is no required monthly principal-and-interest mortgage payment with a reverse loan. The homeowner must continue to occupy the property as their principal residence, and pay their property taxes, homeowners insurance, maintenance and applicable HOA expenses.

This can completely change the conversation about right-sizing.

From Karen's Desk — This One Is Personal

Reverse mortgages aren't just something I work with professionally. My own family used one.

When my mother was 75, I helped her put a reverse mortgage on her home. Over the years, she used some of her equity for things that made her life better—including remodeling her bathroom and buying a car.

Later in her life, her needs changed. Near the end, she required 24-hour in-home assistance, and her home equity became another resource that helped us provide the care she needed while allowing her to remain at home.

After Mom passed away, my sister and I didn't lose the house to the reverse mortgage company.

We sold an aset and used a portion of those proceeds to pay off the reverse mortgage. We then kept her home and rented it for another ten years before eventually selling it.

A reverse mortgage is a loan secured by the property; it doesn't mean the lender owns the home. When the loan becomes due, the heirs can determine how they want to satisfy it based on the circumstances and applicable loan requirements.

For our family, Mom's home wasn't simply an asset to preserve for her children. It was her asset, and it helped take care of her when she needed it.

Ask Karen

“Mom has a reverse mortgage and just passed away. What do we do with the house?”

First, don't panic—and don't ignore notices from the loan servicer.

They may sell the property, repay the reverse mortgage from the proceeds and retain the remaining equity.

They may choose to keep the property and satisfy the reverse-mortgage payoff, potentially using other assets or new financing.

And if the balance is greater than the property's value, in some cases the heirs can buy the property for 95% of its appraised value .

Timing matters, so as soon as a parent passes the heirs should bring in someone who understands reverse mortgages immediately, rather than waiting several months to decide what to do with the property.

Realtor Talking Point of the Week

Here's the question I'd ask your senior homeowners:

“If maintaining this house eventually becomes too much, have you thought about where you'd like to live next?”

Don't assume they're going to rent.  Don't assume they'll pay cash. And don't assume they're going to stay in the current home forever.

Start the conversation about what they actually want their next chapter to look like.

AI Prompt of the Week for Realtors

Copy and paste this into ChatGPT:

Act as an experienced Orange County Realtor writing to longtime homeowners age 62 and older. Create a warm, respectful, non-salesy email about whether their current home still fits the next chapter of their lives. Mention reasons someone might consider right-sizing, such as maintenance, stairs, wanting to travel more, or moving closer to family. Explain that selling does not necessarily mean they must become renters or put all of their sale proceeds into the next home. Mention that qualified homeowners may be able to use a HECM for Purchase to buy another primary residence, and encourage them to speak with a knowledgeable mortgage professional about their options. Do not provide financial, tax or legal advice. Keep the email under 250 words.

One More Important Conversation: Include the Kids

One thing I strongly encourage with reverse mortgages is including the adult children in the conversation.

Many of the fears surrounding reverse mortgages come from misunderstanding.

No, the bank doesn't own the house. The homeowner retains title.

Yes, the children can inherit the property. But the reverse-mortgage balance will eventually need to be satisfied.

And yes, there may still be substantial equity for the family. If the property is worth more than the loan balance when it is sold, the reverse mortgage is repaid and the remaining proceeds belong to the homeowner or estate.

Those are conversations I'd much rather have with the family today than have the children trying to figure everything out after Mom or Dad has passed away.

If you have a senior homeowner, an adult child helping Mom or Dad, or a family that has inherited a property with a reverse mortgage, please call me early.

These situations deserve thoughtful planning, and I'm always happy to help you and your clients understand the options.

Have a wonderful weekend!

Karen Card
The Card Team
Sr. Loan Officer | NMLS #235218
American Pacific Mortgage Corporation

Helping Veterans, Self-Employed Borrowers, First-Time Buyers, Seniors, Families in Transition and Homeowners Navigate Today's Mortgage Market.

Need Your Equity -- But Love Your Mortgage Rate?

 All I hear these days is:

“How can I access some of my home equity without disturbing my low-interest first mortgage?”

There may be a simple solution: a second mortgage.

Instead of refinancing your entire first mortgage and giving up that great rate, we can explore borrowing against a portion of your equity while leaving your existing first mortgage in place.

There are two common options:

HELOC — Home Equity Line of Credit
A revolving line of credit, typically with a variable interest rate. You borrow what you need, when you need it, up to your approved limit.

HELOAN — Home Equity Loan
A lump-sum second mortgage, typically with a fixed interest rate and fixed monthly payment.

Both can be placed behind your existing first mortgage, allowing you to preserve that low rate.

And because one size does NOT fit all, we have a variety of programs for different borrower situations—including options for self-employed homeowners and other borrowers who may not fit neatly into the traditional lending box.

What about homeowners 62+?

We even have reverse mortgage second-lien options for qualifying older homeowners that can provide access to equity without requiring a monthly mortgage payment.*

So whether you're considering a remodel, paying off higher-interest debt, helping a child purchase a home, buying another property—or simply want to understand what your equity could do for you—give us a call.

Let's look at the numbers before you disturb that great first mortgage!

We are here to help.

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

What Buyers are Really Asking; Divorce & Life Transitions

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: Divorce & Life Transitions

Divorce is one of life's most challenging transitions, and for many people, their home is their largest asset. Unfortunately, one of the biggest mistakes I see is waiting until the divorce is finalized before discussing mortgage financing.

By then, some opportunities may already have been lost.

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

"Can I keep the house after my divorce?"

Possibly—but the answer depends on much more than simply wanting to keep it.

Can the remaining spouse qualify on their own? Will support income be received, and can it be used for qualification? Is refinancing necessary? These questions should be addressed early in the process, not after the settlement agreement has been signed.

"Does the divorce decree remove me from the mortgage?"

No.

A divorce decree determines who is responsible for the home as part of the legal settlement, but it does not automatically remove a borrower from the mortgage loan. In many cases, refinancing or another approved solution is needed before one spouse is released from liability.  However, this loan will not be considered for the spouse who is  not responsible for the loan, when purchasing a new home.

"Can support income help me qualify?"

Often, yes.

Depending on the loan program and documentation, alimony or child support income may be considered for qualification. The timing, documentation, and history of those payments can make a significant difference.  Typically six months of receipt is required in order to use it.

"Can I buy another home before my divorce is final?"

Sometimes.

Every situation is unique. Factors such as qualifying income, existing mortgage obligations, the terms of the separation agreement, and available assets all play an important role. This is one reason it's so valuable to begin planning early.  I’ve handled these situations before, and so long as there is a court approved property division agreement, it is possible.

Karen's Loan Desk

One of the most rewarding parts of my job is helping clients through major life transitions.

I've worked with many individuals before, during, and after a divorce. While every situation is different, I've learned that the earlier we have the mortgage conversation, the more options we usually have.

Sometimes it's not about finding a loan—it's about creating a strategy that supports the best possible outcome for everyone involved.

The takeaway?

Don't wait until the divorce is final to discuss financing. A conversation early in the process can help avoid surprises and preserve valuable options.

AI Prompt of the Week for Realtors

One of the best ways to use ChatGPT is to communicate with empathy while providing helpful information. Copy and paste this prompt:

Act as an experienced Orange County Realtor. Write a compassionate email to someone going through a divorce who may be concerned about their housing options. The email should be reassuring, educational, and non-salesy. Explain why it's important to speak with a mortgage professional early in the process to understand financing options before major decisions are finalized. End with a gentle invitation to ask questions. Keep it under 300 words.

Realtor Tip of the Week

If you have clients navigating a divorce, separation, or another major life transition, let's have a conversation before the property is listed, refinanced, or awarded in the settlement.

A simple planning session can help answer important questions, identify potential challenges, and give your clients greater confidence as they move forward.

As always, I'm happy to review any scenario, answer questions, or help develop a financing strategy that best serves your clients.

Have a wonderful weekend!

 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.

BOO! 👻 The ghouls are out, and football season is here!

This year has flown by — Halloween will soon be upon us! We’d love to hear what your costume will be. One of my personal favorites is Frida Kahlo with the unibrow — what’s yours?

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🏡 Buyers’ Market

As time on the market expands for most sellers, the market is definitely shifting to benefit buyers. Traditionally, this time of year brings fewer new listings, so we may see market times adjust even more. We’ll see…

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💸 Mortgage Rates

The news of the day is: steady as she goes. Rates are up slightly from their lows of the year but are still holding in a fairly tight range near 6.5%.
Did you know what the average mortgage rate was in 2006? Between 6.1% and 6.8%. Sound familiar? The big difference, of course, is that home prices were much lower then, making housing more affordable.

Keep in mind there’s no “one-size-fits-all” mortgage rate. Rates vary widely depending on factors like loan amount, credit score, program type, property type, purpose, points paid, and more.

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🏠 Time to Refinance?

The average homeowner nationwide now holds roughly 59% equity — an astounding number driven by the dramatic rise in values during the COVID era when rates were artificially low.

That creates enormous opportunity for refinancing, especially if rates move closer to the 5% range as many anticipate next year.

For homeowners who want to tap into their equity without giving up their low first mortgage rate, there are now second trust deed options — both fixed and variable (typically known as HELOCs).

A Reverse loan in 2nd position is also growing in popularity for those over age 55 with a low-rate first mortgage. This option is structured as a fixed-rate second with full proceeds drawn at closing — not a line of credit — a new twist on reverse financing!

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💼 Creative Loan Programs

In the mortgage world, these are called Non-QM loans (non–qualified mortgages). They don’t fit traditional Fannie, Freddie, or FHA guidelines but are designed to meet real-world borrower needs.

Examples include:

• Bank Statement Loans – great for self-employed borrowers who deduct significant business expenses.

• DSCR Loans (Debt Service Coverage Ratio) – for investors, qualified solely on the property’s rental income.

• 1099 Loans – ideal for contractors or gig-economy earners.

We’re also seeing an expansion of asset-based lending, now easier to qualify for than ever. Some programs only require that assets cover five years’ worth of income (divided by 60 months) to qualify.

Down Payment Assistance (DPA) programs are also thriving — some offering up to or even over 100% financing, much like VA or CAL-Vet loans.

Interest-only loans are making a comeback, too. While their rates are slightly higher, the lower monthly payments can be an attractive strategy for borrowers who expect most of their wealth growth to come from appreciation rather than principal reduction.

Finally, bridge loan programs are on the rise again, providing a path to purchase a new home before selling your current one — a great option in today’s market.

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🍷 Wine Country & Family Time 

We just returned from a quick trip to Paso Robles, where we learned that tourism is down about 30% this year. Despite that, the wineries still seemed busy — many fully booked and requiring reservations for tastings and dining. We enjoyed some lovely wines, caught up with old friends at a wedding celebration, and (of course) brought home a few bottles. 😊

Next, we headed “over the hill” to visit my sister in Madera and took a day trip into Yosemite. The gates were wide open due to the government shutdown, and although most campgrounds were closed, plenty of tourists were out picnicking and taking photos — us included!

We stopped by the historic Ahwahnee Hotel for a quick tour and a little trip down memory lane before watching climbers scale the face of El Capitan. Apparently, there were a dozen or so — we could only spot a few without high-powered binoculars!

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Cheers to all!
Go Trojans — and good luck to your teams as well! 🏈

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