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When it comes to first-time homebuying, understanding what constitutes a “typical” down payment can make the process feel a lot more attainable. In 2024, the median down payment among first-time buyers was 9 percent of the purchase price—meaning on a $400,000 home, most newcomers put down about $36,000. However, loan programs tailored for first-timers often let you start with as little as 3 percent down, and government-backed options like VA or USDA loans may even require zero down.

Deciding on your down payment is all about weighing the trade-offs. A 20 percent down payment is considered ideal: it typically secures the lowest interest rates and lets you bypass private mortgage insurance (PMI) altogether. But given the median amortization patterns, very few first-timers reach that benchmark right out of the gate—only about one-third manage to save it, while the majority settle somewhere between 3 percent and 10 percent.

Putting down less than 20 percent has its own advantages. By starting with just 3 percent or 5 percent down, you’re able to enter the market sooner—locking in today’s prices before they climb further—while preserving cash for closing costs, moving expenses, and the small repairs that inevitably arise. Just keep in mind that any down payment under 20 percent brings PMI, which can add roughly $30–$70 per month for every $100,000 you borrow, and means higher monthly payments until you accrue enough equity.

The right “typical” down payment for you will hinge on your personal comfort level and long-term goals. If you can pull together 10 percent, you’ll strike a solid balance between a lower interest rate and retained reserves. If your priority is getting into a home quickly, a 3 percent or even zero-down option can make sense—knowing you can eliminate PMI once you hit 20 percent equity. Ready to crunch the numbers for your specific situation? Schedule a free consultation on our website, and we’ll help you determine the down payment strategy that fits your budget and goals.

A 3/1 adjustable-rate mortgage (ARM) offers homebuyers a fixed interest rate for the first three years of their loan, followed by annual rate adjustments for the remaining term. During the initial three-year period, your monthly payments remain consistent, giving you the predictability of a traditional fixed-rate mortgage. After those introductory years, however, the interest rate can adjust once per year based on market indexes—such as Treasury yields or the Secured Overnight Financing Rate—plus a set margin determined by the lender.

Once the three-year fixed period ends, the annual rate adjustments are governed by caps that limit how much your interest rate can increase at each adjustment and over the life of the loan. For example, an initial adjustment cap might restrict your rate from rising more than 2 percentage points at the first change, while a periodic cap might cap future annual adjustments at 1 percentage point. A lifetime cap establishes the maximum interest rate you could ever be charged under this ARM, ensuring that, even if market rates spike dramatically, you’ll never pay beyond a specified ceiling.

There are several scenarios in which a 3/1 ARM may make sense. If you plan to sell or refinance within three to five years, you can take advantage of the lower introductory rate without worrying about long-term volatility. Similarly, if you anticipate a career change or relocation in the near future, the short fixed period allows you to maximize savings in the early years. On the flip side, borrowers should be comfortable with the possibility of higher payments after year three—if market rates rise, so will your monthly mortgage payment. It’s crucial to have a financial cushion or a plan in place to absorb potential increases.

Compared to a 30-year fixed-rate mortgage, a 3/1 ARM typically starts with a lower rate, which can translate to significant upfront savings. However, it carries more uncertainty than a fixed-rate loan, especially if you keep the mortgage beyond the fixed period. If you value long-term stability and predictability, a fixed-rate option might be preferable. But for many buyers who intend to move or refinance before the rate adjusts, a 3/1 ARM can offer an attractive balance of lower initial costs and manageable risk. If you’d like to know more, schedule a consultation with us on our website.

Homeowners sometimes assume that today’s higher mortgage rates have slammed the door on refinancing, yet the truth is more nuanced. While the era of sub-3 percent loans is well behind us, national lending data show 30-year fixed rates have mostly hovered in the high-6 to low-7 percent range since 2023, with the occasional dip. If you locked in a loan closer to 8 percent during that spike—or if you have goals that go beyond trimming the rate—refinancing can still deliver meaningful value. The key is to weigh costs against long-term gains and be ready to act quickly when mini-reprieves in pricing appear.

One scenario where refinancing shines is when your personal finances have improved. Say you bought with minimal cash down and a mid-600 credit score at the tail end of 2022, landing a 7.35 percent rate. Two years later you’ve slashed debt, boosted your score into the 700s, and built more equity. Even a new loan in the mid-6 percent range could shave hundreds off your monthly payment and cancel expensive mortgage insurance—savings that compound over the life of the loan and can recoup closing costs in as little as 18–24 months.

Refinances also open strategic doors that aren’t strictly “rate plays.” Swapping an adjustable-rate mortgage before its teaser period ends can lock in stable payments, and converting an FHA loan to conventional financing can eliminate mortgage insurance altogether. For clients navigating a divorce or dissolving a business partnership, a refinance is the cleanest way to remove a co-borrower and tap equity for a buy-out in the same transaction—a move that protects credit profiles on both sides.

Finally, a cash-out refinance can be the most cost-effective route to large sums of capital, even when first-lien rates exceed six percent. Because primary-mortgage pricing is typically lower than home-equity loans or HELOCs, rolling renovation costs, tuition bills, or medical expenses into one fixed, predictable payment can make financial sense—especially if the existing mortgage balance is small or paid off. Before you move forward, calculate your break-even timeline, consider whether you’d refinance again if rates drop, and explore point-buy-downs that shorten payback periods.
Of course schedule a consultation with us on our website and we can see what best fits your needs.

A piggyback loan—often called an 80/10/10 or combination mortgage—is a clever way to buy a home with less cash up front. Instead of a single mortgage plus private mortgage insurance (PMI), you take out two loans at closing: one for 80 percent of the home’s value and a second for 10 percent. You then cover the remaining 10 percent with your own down payment. This structure lets you sidestep PMI, which can add hundreds to your monthly payment, and keeps your main mortgage under the conforming loan limit so you avoid the stricter requirements of a jumbo loan.

Beyond skipping PMI and jumbo-loan hurdles, piggyback loans let you stretch your cash reserves. In a standard 80/10/10 setup, you’re only putting 10 percent down instead of 20. Some lenders even offer an 80/15/5 arrangement, where you contribute just 5 percent and borrow 15 percent as your second mortgage. You can use either a fixed‐rate home equity loan or a home equity line of credit (HELOC) for that second piece, giving you flexibility in how you tap into additional funds without dipping into savings for closing costs or renovation projects.

Of course, there are trade-offs. Your second mortgage usually comes with a higher, sometimes variable interest rate, so your payment could rise if rates climb. You’ll also pay closing costs on both loans, which can eat into the savings you’d hoped to gain from avoiding PMI. And if you need to refinance down the road, juggling two separate lenders and loan products can complicate the process. It’s important to run the numbers carefully—compare combined payments and fees side by side with a single conventional or jumbo loan scenario.

If you’re intrigued by the piggyback strategy, start by shopping around for both primary and second-mortgage lenders. Look at interest rates, loan terms, and qualification standards, and be prepared to supply documentation for both applications at once. As you gather quotes, don’t forget to weigh low-down-payment alternatives, too: FHA programs require as little as 3.5 percent down, Fannie Mae and Freddie Mac’s Conventional 97 loan needs only 3 percent, and VA loans offer zero-down financing for qualifying veterans. With a clear understanding of your options, you’ll be ready to choose the path that lets you move in sooner—without overextending your budget. And of course schedule a consultation with us on our website and we can review your specific situation.

When it comes to mortgage rates, you might wonder how much influence the Federal Reserve really has. While the Fed doesn’t directly set mortgage rates, its decisions significantly impact the borrowing environment for homeowners. Recently, the Fed chose to maintain its benchmark interest rate at 4.25–4.5 percent, signaling stability after several changes throughout 2024. This decision encourages lenders to keep mortgage rates relatively steady, which can offer some comfort to potential homebuyers.

Mortgage rates mainly track the yield on the 10-year Treasury bond rather than the Fed’s rate directly. When the Fed keeps rates unchanged, it can reassure bond markets, often leading to slightly lower Treasury yields and, consequently, more affordable mortgages. For instance, after the Fed’s recent announcement, the bond market responded positively, lowering the 10-year Treasury yield. This is great news if you’re considering buying a home soon, as it can mean lower monthly mortgage payments.

Adjustable-rate mortgages (ARMs) are a bit more sensitive to Fed decisions. The interest rates on ARMs often follow financial benchmarks like the Secured Overnight Financing Rate (SOFR), which the Fed influences more directly. So, if the Fed decides to raise or lower its benchmark rate, ARM borrowers will typically see their interest rates adjust accordingly at their next reset period.

Ultimately, while the Federal Reserve’s actions set the stage, several other factors also influence mortgage rates—including inflation, the demand for mortgages, and investor interest in mortgage-backed securities. To secure the best mortgage rate, maintain a strong credit score, reduce your debt, save up for a sizable down payment, and always compare loan offers by looking closely at the APR, not just the advertised interest rate. Doing this ensures you’ll get the best possible deal, no matter what the Fed decides next.

Inheriting a home with an outstanding mortgage can be a springboard to new opportunities rather than a source of anxiety. By gathering the loan statements, confirming the servicer’s details, and keeping payments current, you safeguard the property while the estate is settled and gain precious time to weigh your best options. Reviewing the loan’s balance, interest rate, and payment schedule—ideally alongside an estate-planning attorney—equips you with clarity and confidence, ensuring the process stays smooth and compliant with state-specific rules.

Armed with the numbers, heirs can choose a path that turns the property into an asset. Thanks to federal protections, relatives who wish to live in—or rent out—the home can assume the loan without triggering a costly due-on-sale clause. If several heirs are involved, one party can finance a buy-out (via a probate loan or cash-out refinance) so everyone benefits fairly. Alternatively, selling the property often yields a “step-up” in tax basis, letting your clients capture equity with little or no capital-gains liability—cash that can fund new dreams, investments, or charitable gifts.

Even homes covered by a reverse mortgage come with encouraging solutions. Lenders provide a six-month window—extendable up to a year—to repay the balance through refinancing, a 95 percent value sale, or a deed-in-lieu that erases remaining debt. Throughout that period, maintaining taxes, insurance, and basic upkeep not only preserves the property’s value but also keeps every option open. When handled proactively, heirs can transform what feels like a ticking clock into a flexible timeline for smart financial decisions.

Finally, an “underwater” mortgage doesn’t have to sink your plans. Many reverse and other non-recourse loans limit the lender’s remedy to the property itself, paving the way for a strategic short sale or deed-in-lieu that protects personal assets. And if no will exists, swift legal guidance ensures the right heirs are recognized and empowered. By partnering with an experienced mortgage professional early, families convert a potentially stressful inheritance into a positive, wealth-building milestone—fulfilling the loved one’s legacy while opening doors to their own bright future.

Many people assume that once you retire, your chance to qualify for a mortgage disappears—but that’s not the case. Thanks to fair lending laws, age cannot legally be used against you when applying for a home loan. Whether you’re downsizing, helping a family member, or relocating for lifestyle or tax reasons, it’s absolutely possible to get approved for a mortgage later in life. What matters most is your financial profile—your income, credit, debt-to-income ratio, and assets.

Understanding the Challenges Older Borrowers May Face

While lenders cannot reject your application based on age, retirees may face some practical hurdles. Often, fixed incomes or distributions from retirement accounts can make it harder to meet traditional income requirements. Additionally, existing mortgage debt or high monthly obligations can increase your debt-to-income ratio, which lenders weigh heavily when evaluating your application. That said, retirees who maintain strong credit and manage debt wisely are still well-positioned to qualify.

What You Need to Qualify

Lenders review the same criteria for all applicants: credit score, income verification, and debt obligations. Retirees can qualify using Social Security, pension, investment, or rental income—provided the documentation supports it. Most lenders want to see at least two months of consistent bank deposits and may “gross up” nontaxable income by as much as 25% to improve your chances of qualifying. A good credit score and sufficient home equity can also help you access lower rates or different loan options, such as conventional, FHA, or even reverse mortgages.

Smart Lending Options for Older Adults

If you’re in or nearing retirement, consider your long-term financial goals before taking on a mortgage. For some, a shorter loan term with a higher monthly payment may be a better fit. Others may benefit from tapping into home equity through a HELOC or reverse mortgage. The key is choosing a financing solution that fits your income, lifestyle, and legacy goals. Of course check with us if you’d like more information and we can see what fits your specific needs!

familiar with private mortgage insurance (PMI). This insurance is typically required by lenders to protect themselves in case a borrower defaults. For a few recent tax years, homeowners had the opportunity to deduct PMI premiums on their federal returns, offering some relief on their overall tax burden. However, that deduction expired after the 2021 tax year, and currently, PMI is no longer tax-deductible.

Between 2018 and 2021, eligible homeowners who itemized their deductions could write off PMI premiums. This was a welcome break for many, especially those paying hundreds annually in PMI costs. If you didn’t take advantage of the deduction during those years, there’s still a chance: you may be able to file an amended return and claim those missed deductions. Just keep in mind that your mortgage must have originated (or been refinanced) on or after January 1, 2007, to qualify.

So, where does that leave us now? As of the 2022 tax year and beyond, the PMI deduction is no longer available. A new bill has been introduced in Congress to potentially reinstate it, but until it’s passed and signed into law, homeowners should plan their taxes accordingly. This change highlights the importance of staying up to date with tax law changes, especially if you’re navigating homeownership with a tight budget.

While the expired deduction may not have been a game-changer for everyone, it could have still saved you a few hundred dollars a year—money that adds up over time. If you’re unsure whether you missed out on this deduction in previous years or want to know if an amended return makes sense, it’s worth speaking with a tax professional or schedule a review with us on our website and we can help you decide.