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 

 

FHA AND VA LOANS LOOKING BETTER!

BIG NEWS ON FHA AND VA LOANS!       

HUD has finally reduced the monthly Mortgage Insurance (MI) premiums for FHA loans. We’ve been anxiously awaiting this correction since they had amassed a rather large overage of funds collected for this insurance, which basically protects the lender from losses on high loan-to-value loans.

This is great news for first time homebuyers with low down payments.  The drop in monthly MI of 35 basis points presents a big savings in the monthly payment, particularly for those with 3.5% to 5% down, on purchases up to $1.1 million.  Savings is in the range of over $3000 annually.

VA has reduced their upfront Funding Fee, which is a fee charged by the VA for all VA loans.  This fee is paid directly to the VA and is typically added to the loan balance so it is financed over time as part of the loan payment.  This reduction makes it more attractive for repeat uses of VA loans, which offer lower interest rates and higher loan-to-values, without any Mortgage Insurance. 

WHO WANTS TO SELL?

Our inventory of homes for sale is shrinking again locally.  This means that sales volume has dropped quite a bit.  Many homeowners who might like to sell are postponing a move, as they don’t want to lose that low interest rate loan they currently have.

But it also means that home prices are just not going to drop much at all, at least locally.  Demand is currently about equal to or exceeding supply.  We aren’t seeing multiple offers on properties, but we also aren’t seeing big price drops.

We still see this as a great opportunity for those homebuyers with the stomach for higher rates, as they have little competition.  And those buyers who move in now will have the opportunity to drop their rates and refinance sometime later in the year, or early next year, when we anticipate rates to drop.

PET UPDATE

After quite a long hiatus, we decided to adopt two cats (siblings) last July.  It has been an adjustment but they have settled in and we are enjoying their company.  The only thing we forgot is now we have to have cat sitters while we are out of town!  Isabel and Theo are here:

As always please reach out with questions on these programs.