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Mortgage News and Updates – Summer 2025
Get the latest mortgage industry news. Click here.


-Economy & Mortgages: Mortgage Rate Outlook—Is it a Buyer’s Market Yet?
-What is SOFR?
-Elevated Fixed Loan Rates Revive Interest in ARMs – Discover the Reasons
-Down Payment Assistance Programs Expanding
-Helping the Family Build Wealth, with a Gift of Equity

Economy & Mortgages: Mortgage Rate Outlook—Is it a Buyer’s Market Yet?

What is SOFR?

Nope. It’s not what you sit on to watch TV. SOFR (Secured Overnight Financing Rate) is the benchmark interest rate that many U.S. adjustable-rate mortgages (ARMs) track with. SOFR represents banks’ cost of borrowing cash overnight, and it is published daily by the New York Federal Reserve.

SOFR is a more robust, transparent alternative to the London Interbank Rate (LIBOR) which had been the primary ARM benchmark for decades before a crisis in its formulation process caused the marketplace to lose confidence in it.

The interest rate on an ARM is computed by adding a fixed margin (set by the terms of the mortgage) to the SOFR interest rate that changes over time. After an initial fixed period, ARMs based on SOFR can adjust anywhere from monthly to annually, based on the exact type of ARM (1-month, 6-month, or 1-year adjustments).

See our article below for the full story!

Elevated Fixed Loan Rates Revive Interest in ARMs – Discover the Reasons

Adjustable-rate mortgages (ARMs) are more popular now due to persistently high mortgage rates. ARMs get more attention when rates are elevated, since they offer lower initial interest rates than traditional fixed-rate mortgages. Why is this?

Because with a fixed-rate mortgage, the lender carries all the risk of rates moving unfavorably. So the rates on fixed rate mortgages are always a bit higher. With an adjustable-rate loan, the borrower carries some of the risk after the initial fixed-rate period is up, so the loan is priced more attractively.

According to a survey by U.S. News, about 26% of ARM borrowers chose the 5/1 ARM, which offers a fixed interest rate for the first five years, followed by annual adjustments based on prevailing market rates. The next most popular was the 5/6 ARM, 22% of borrowers, which features a fixed rate for five years and adjusts every six months thereafter. ARMs can start with a fixed rate for 3, 5, 7, or 10 years.

There are a number of great reasons to consider ARMs as we develop your home financing strategy.

-Lower upfront payments: As above, the lower initial rate can be advantageous. Smaller initial monthly payments can help you to qualify for larger loans (or qualify for the loan at all.)

-Your time horizon: A key thing to consider is whether you really need a loan that is fixed for 30 years, especially if your time horizon is less. ARMs are a great option for buyers who don’t plan to keep the loan or the home long-term, and you can match the fixed period to your needs.

Where rates may be headed: Interest rates may fall in the future, and you may be able to ride rates down without refinancing and resetting the amortization curve back to 30 years. If they don’t fall by the end of the fixed period, you can reassess whether to refinance, or (if rates seem stable) stay put. ARMs typically come with rate caps to limit how much the interest rate can increase each year.

Why ARMs Are Particularly Popular for Jumbo Loans

Lenders do more ARM business on jumbo loans, especially when rates are elevated. According to various industry reports (e.g., the Mortgage Bankers Association or Freddie Mac), in some months over 40% of jumbo loan originations were ARMs, versus less than 10% in the conventional (smaller loan) market.

Jumbo borrowers often select ARMs to better manage cash flow in the early years of the loan and refinance or move before the rate resets. On larger loans, even a quarter percent difference in rate can offer a big monthly payment difference.

Here’s a comparison for a $1 million Jumbo loan:

— 30-Year Fixed at 6.5%: $6,321/month (Principal & Interest)

— 7/6 ARM at 6.125% (fixed for 7 years, adjusts every 6 months thereafter): $6,076 /month

— The 7/6 ARM saves you about $245/month—or $20,580 over the first 7 years.

We always explore every option with each client for purchases and refinances. Sometimes the best choice is not always the most obvious one. We look forward to having a robust discussion with you soon!

Down Payment Assistance Programs Expanding

Owning a home remains a bedrock part of the American Dream, but the hurdles remain high for home buyers, given current interest rates and tight supply.

The #1 hurdle? Amassing the needed downpayment to reduce the size of the loan needed to purchase the property.

With the cost of many starter homes rising to as much as $1 million (in over 230 U.S. municipalities), the traditional 20% downpayment can be a whopping $200,000. Thankfully, many low down payment programs now exist, and the average first time buyer’s down payment is now about 9% nationally. That’s still a lot of cash.

Recognizing the size of this challenge, local governments and non-profits have made it their mission to lower the height of that hurdle to get more people into their first home. One tool that has exploded in popularity over the last few years is the downpayment assistance program (DPA).

As of the end of 2024, there were over 2,400 DPA programs available nationwide, with an average benefit of approximately $17,000 per recipient. And 172 new programs were added in 2024, a 7% year-over-year increase.

These programs are offered by a mix of municipalities, non-profits, and state housing finance agencies (HFA’s). Among these, the Mortgage Bankers Association reports that in Q4 2024, 39% of funding sources came from municipalities, followed by non-profits at 21% and state HFAs at 19%.  

The types of assistance provided are diverse, encompassing grants, forgivable loans, and deferred payment second mortgages. There has also been a notable increase in programs supporting the purchase of manufactured and multi-family homes to broaden access to affordable housing options.

Assistance programs often have income maximums, and are sometimes targeted to certain types of buyers or properties, with the goal of allocating funds to those in the community who need it most. Programs often have limits to the number of buyers they can assist, since the source of money is not infinite.

Don’t be surprised to find that a given program is not taking new applicants until the next funding year. It pays to start early and assess multiple programs. We can help with that.

It’s sometimes possible to use “stacked assistance,” combining multiple assistance programs to maximize support.

We stay on top of the programs available in our local market. If you or someone you know is hoping to overcome the down payment challenge, contact us for details.

Helping the Family Build Wealth, with a Gift of Equity

It goes without saying today that coming up with a huge down payment is a barrier for young people seeking their first home. At the same time, if an aging family member has a home that they need to move out of, it presents an opportunity for the next generation.

Instead of selling that home to just anyone, they can keep it in the family by selling it to a young family member using a “gift of equity”. A gift of equity is when a home seller sells a home at a price below its appraised value, and the difference (the “gift”) counts as equity for the buyer. Here’s an example:

• Appraised value: $700,000

• Sale price: $560,000

• Gift of equity: $140,000 (20%)

The gift serves as all or part of the down payment. If the gift ($140,000 in this example) is at or above 20%, it eliminates the need for private mortgage insurance. The lower borrowed amount also helps reduce closing costs. The tactic is typically only allowed from family members and close relatives. The seller must provide a gift letter stating no repayment is expected, and the property usually must be a primary residence.

This is just one of the many ways we craft financing programs to help the younger generation take that first step into homeownership, starting them on the path to building long-term wealth.

Copyright © 2025 Myers Capital Hawaii 

Regarding the direction of U.S. economic policies, and the impact those policies will have on our economy, it’s still anybody’s guess. Meanwhile, the U.S. housing market seems to be navigating its own path, shaped by elevated mortgage rates, tight supply, and evolving buyer preferences.

Home price increases have slowed, and we’re starting to see longer days-on-market coupled with price cuts on homes that were priced too high by overly optimistic sellers. While it may yet be a bit early to declare a buyer’s market, it’s certainly becoming more balanced!

Mortgage Rates – More Like This
Rates are likely to stay elevated for the rest of the year. The jobs picture is slowing, but the overall labor market is still tight, and the Fed has emphasized that they need more clarity on the impact of inflation, government policy, and global trade before bringing the Fed Funds Rate down. Most economists are now projecting two rate cuts later in the year, if the job market weakens further this summer.

Keep an eye on the 10-year bond rate, which mortgage rates generally move in tandem with. While the Fed may have control over the short end of the rate curve, the global bond market’s appetite for U.S. debt will control mortgage rates.

And we’ve seen some reason for concern here. “Mortgage borrowing costs could decline in 2025 but not by much. Rates in the 6% to 7% range are likely to be the new normal for mortgage costs for the foreseeable future,” wrote Russell Price, Chief Economist at Ameriprise Financial.

Home Prices Should Continue Up — Slowly
According to the National Association of Realtors Chief Economist Lawrence Yun, U.S. home prices should rise by 3% in 2025. While not the meteoric rise we’ve seen recently, if you’re waiting for a crash, you might be disappointed. Despite this year’s slow start, existing-home sales volume is still expected to grow by 6%.

Buyer Preferences – Shifting
Buyers today seem to be prioritizing features such as remodeled areas, updated flooring, updated appliances, outdoor cooking, climate resiliency, and solar panels with whole-home batteries.

Virtual reality tours have transformed home shopping; 95% of buyers search for homes online and 77% ask for virtual tours.

If your home feels like it needs a refresh, let’s talk about tapping built-up equity to get your home up to date! And, if a move is in your future, let’s get ahead of the curve and get the right financing plans in place. It’s never too early to start the process, so that you’re ready to pounce when the time is right!

Get the latest mortgage industry news. Click here. 

Copyright © 2025 Myers Capital Hawaii 

Blog Summary: Bridge loans are short-term financing tools typically 6 to 24 months long that help real estate investors act quickly on real estate opportunities. They offer fast capital, flexibility, and access to equity, making them ideal for competitive markets. Investors can secure deals, fund improvements, and scale portfolios without traditional financing delays.

• Key benefits: speed, equity access, asset repositioning
• No personal income verification 
• Fast approval and funding timelines
• Close in as little as 10 days 
• Terms: 6 to 24 months. Extensions possible on a case-by-case-basis. 
• Provide cash out when property is already owned and has substantial equity
• Acquire or finance properties that are in disrepair 

Investors often face situations in which they need to move fast on a real estate opportunity. Sometimes, they need to act before selling an existing asset or securing long-term financing.

When timing is everything, bridge loans become one of the most powerful tools real estate investors can use. They’re key to avoiding the delays of traditional funding.

What is a bridge loan, and how can it help savvy investors scale their portfolios, especially when time is of the essence? In this blog, we’ll discuss how bridge loans work. We’ll explore their benefits and discuss what real estate investors should consider when choosing this type of financing.

Continue reading to learn how short-term funding keeps deals moving.

What Is a Bridge Loan?

A bridge loan is a short-term financing solution. These unique loans are designed to “bridge the gap” between the purchase of a new property and the sale or refinancing of another.

Essentially, they allow real estate investors to access capital quickly without the long approval times of traditional mortgages.

Bridge loans for investors differ from bridge loans for consumers. For example, consumer borrowers might use a bridge loan to buy a new home before selling their current one. In contrast, real estate investors use bridge loans more strategically.

Reasons an investor might use a bridge loan include:

•    Property acquisition

•    Renovations

•    Repositioning assets

•    Tapping equity from existing holdings

A bridge loan delivers capital so investors can secure properties, make improvements, and refinance into a long-term mortgage.

How Does a Bridge Loan Work?

Bridge loans provide fast capital backed by real estate collateral. They’re commonly interest-only, with repayment due at the end of the term. In most cases, the term ends once the investor sells, refinances, or stabilizes the asset.

Benefits of Bridge Loans for Real Estate Investors

Real estate investors use bridge loans for several key reasons:

• Speed and flexibility that help investors close in days rather than weeks.
• Opportunity-driven financing, allowing investors to capitalize on distressed or undervalued properties.
• Asset repositioning to fund property upgrades or repositioning strategies.
• Access to equity without needing to sell a property.
• Portfolio growth without waiting on sales or approvals.

Bridge lenders like Myers Capital offer streamlined underwriting, expedited approvals, and flexible terms when traditional financing won’t apply.

Who Offers Bridge Loans?

Private lenders, specialty mortgage brokers, and direct lenders may offer bridge loans. Myers Capital is a trusted source for real estate investors in Hawaii and beyond. We offer tailored bridge loan solutions that support fast acquisitions on deals with a strong profitability margin.

How Do You Qualify for a Bridge Loan?

Bridge loan requirements vary by lender, but most investors will need: 

• Sufficient equity in existing or target properties.
• A strong investment or exit strategy.

Myers Capital’s mortgage professionals work closely with investors to streamline the approval process. Our team will work with you to create creative financing strategies to help our investors execute on deals that make sense.

How Long Does It Take to Get a Bridge Loan?

How long it takes to get a bridge loan depends on deal complexity and documentation readiness.

With that said, one of the biggest advantages of bridge loans is speed. Strong, prepared candidates can often receive bridge financing efficiently. With Myers Capital, many bridge loans can be approved and funded in as little as 10 days.

The Bottom Line: Are Bridge Loans a Good Idea?

For investors with a strong investment and exit strategy, bridge loans can make a tremendous amount of sense. They provide access to opportunities that traditional financing would miss. If you are an aspiring or experienced real estate investor, bridge loans can help you capitalize on competitive opportunities.

Ready to act fast on your next investment opportunity? Contact us to learn more about Myers Capital’s flexible bridge loan options to get started.

Copyright © 2025 Myers Capital Hawaii 

Blog Summary: Securing a mortgage when you’re self-employed takes planning, but it’s possible with the right approach. Organize finances, explore alternative income documentation, and work with a lender who understands self-employed needs.

-Gather clear financial documentation

-Use bank statements, 1099s, or (Profit & Loss) P&Ls

-Understand how lenders calculate income

-Strengthen your credit profile

-Separate business/personal finances

-Choose a lender experienced with self-employed borrowers

Mortgage loans for self-employed individuals can be more complex than traditional financing. After all, self-employed borrowers must go the extra mile to prove their income and financial stability. However, with the right strategy and lender, you can overcome common hurdles and successfully finance a primary residence, second home or investment property.

At Myers Capital, we know it can be challenging to get a mortgage loan if you’re self-employed. That’s why we specialize in helping self-employed borrowers qualify through alternative income documentation methods and flexible underwriting. In this blog, we’re sharing our top tips for securing mortgage loans for self-employed individuals.

Keep reading to learn how we help freelancers, sole proprietors, and business owners find a place to call home.

Organize Your Financial Documentation

Before you begin, ensure you know the answer to the question “What paperwork do you need for a mortgage?” Documentation plays a critical role in qualifying for a home loan.

Typically, traditional mortgage lenders asked for the following:

-Two years of personal and business tax returns

-Year-to-date profit and loss statements

-Business bank statements

-1099s (if applicable)

-CPA letters verifying business ownership

At Myers Capital, we offer flexible options beyond traditional documentation.

Here are a few other options for self-employed individuals:

-Bank Statement Loans: Use 12 to 24 months of business or personal bank statements to verify income. Tax returns are not required.

-1099 Mortgage Loans: Ideal for independent contractors who receive 1099 income.

-Profit and Loss Statement Loans: Qualify using verified P&L statements instead of tax filings

These options are great for the self-employed because they reflect your real income more accurately.

Understand How Income is Calculated

How do you calculate self-employed income for mortgage loans? Do mortgage lenders use gross or net income for self-employed borrowers?

The answer to both questions is that it depends on your documentation.

Traditional lenders typically use net income from your tax returns. With bank statement or P&L-based loans, you can use gross deposits or operating income offset by a predetermined expense ratio. This alternate documentation can present an accurate picture of your earnings. This can significantly improve your loan eligibility and buying power.

Build a Strong Credit Profile

A high credit score can boost your chances of approval and help you lock in better rates.

To prepare:

-Check your credit report and correct any errors

-Pay down high credit card balances

-Avoid taking on new debt before applying

Will a Business Loan Affect Getting a Mortgage?

A business loan can affect qualifying for a mortgage, but don’t assume it will affect it negatively. Lenders will generally assess your full debt-to-income ratio. Be prepared to explain any business loans and how they impact your monthly cash flow.

Separate Business and Personal Finances

Keeping your personal and business finances in separate accounts shows lenders that you are organized. It also makes it much easier to document your income and expenses.

Separation and organization are especially important if you’re using bank statement loans or P&L statements. In such cases, cash flow must be clearly defined. Having clean financial records helps underwriters trust the numbers you provide. Ultimately, that can speed up the approval process.

Consider a Larger Down Payment

Making a larger down payment can sometimes help offset risk in the eyes of the lender. As a bonus, it might reduce your monthly mortgage payments and increase your loan approval odds. A great mortgage company will help you determine the optimal loan-to-value ratio.

If you can’t afford a larger down payment, that doesn’t mean you don’t have a chance. Always prioritize a down payment strategy that aligns with your financial goals.

Work with a Lender Who Specializes in Self-Employed Borrowers

Traditional banks may reject borrowers who don’t meet rigid documentation standards. But at Myers Capital, we offer flexible loan programs specifically designed for business owners, entrepreneurs, and freelancers. We’re proud to provide the tools self-employed borrowers need to succeed.

Ready to take the next step? Learn more about our mortgage loan options as a self-employed borrower. Contact us for details.

Copyright © 2025 Myers Capital Hawaii 

In an industry obsessed with specialization, one hybrid firm is pursuing on versatility – and it’s paying off.

Automation may cut the grunt work, but running a boutique firm that juggles lending, broking and fund management still demands hands-on hustle – and it’s a model that’s quietly thriving.

While the financial services industry leans increasingly into specialization, some boutique firms are embracing a hybrid model that blends traditional mortgage services with investment fund management. This approach leans heavily on operational efficiency and AI, with automation handling up to 80% of formerly manual tasks.

In high-cost markets like Hawaii, where the median price of a single-family home on Oʻahu reached $1.02 million in early 2024, offering flexible financing and investment solutions under one roof can be the key to staying competitive.

It’s the model Reed Myers (pictured) has refined over the years. During the 2008 crash, he joined the mortgage company his father founded and eventually expanded it into a multi-branch operation. Today, Myers oversees lending, brokering, and fund management at Myers Capital and Myers Investment Group, firms that operate with a lean team but a wide reach – prioritizing personal relationships, low rates, and long-term thinking over high-volume transactions.

From real estate crash to family business
Myers’ financial career began in the Carolinas as an analyst for a real estate investment trust, but the 2008 crash brought everything to a standstill. Projects disappeared, and so did job security.

“All my projects I’d been working so hard on, everything got iced, put on hold; it didn’t look good,” he said. “Even my boss was telling me: ‘You should probably start looking for another position.’”

He joined his father’s company, Myers Capital, which had been founded in 1998. Initially unenthused about the industry as a teenager, Myers’ perspective shifted once he got a deeper look into the business.

“When I got involved in it later as an adult, I started to do really well. I loved it,” he said.

From there, the company grew. He opened a branch in Hawaii and eventually expanded to Virginia, seeing many of his clients beginning to invest in these areas. They were no longer bound by brick-and-mortar offices thanks to advancements in technology and regulatory changes.

“Technology [has] made it very interesting and allowed for opportunities we wouldn’t otherwise have had,” Myers said.

Adaptation, relationships and long-term thinking
Like many, the company embraced remote work after the pandemic, downsizing their physical footprint while maintaining client relationships across the country. But even as business shifted online, his core values remained intact.

“Part of my approach is very hands-on, very personal. I meet with my clients; I sit with them for an hour or two in my office,” he said. “But after COVID, our clients became a whole lot more tech savvy than they were before.”

Managing the investment fund comes with its own demands – namely, raising capital and ensuring it is deployed quickly and soundly to earn the double-digit yield investors are looking for. But for Myers, it’s about relationships more than formal pitches. Some of his borrowers become capital investors, and some investors return as borrowers, creating a flexible network where overlap is not only expected but encouraged.

“We have that full spectrum. We can help them on either side and give them a tremendous amount of creative lending options,” Myers said.

Even in a competitive industry, he doesn’t view other fund managers as adversaries.

“You would think one fund manager is vying for the capital that’s out there, well, it’s yes and no,” he said. “Many times, we collaborate with other fund managers to do larger deals that we would otherwise not be able to execute.”

Lower rates, a key part of his value proposition, come from leveraging volume in negotiations with capital sources – benefits he passes on to clients rather than keeping them as company profit.

“I’d rather have two or three good-quality clients that will refer us to their friends and family and other investors, than trying to maximize profits on any one deal,” he said.

Staying grounded in Hawaii, despite the costs
Living and working in Hawaii, however, comes with its own set of hurdles. The cost of living remains one of the largest challenges – both for him and for his clients.

“An average single-family home in Oahu is about a million dollars. So, if you’re a first-time home buyer, that’s not what you’re going for, unless you have gift funds from family members or are a very high-income earner,” Myers said.

He pointed out that even with help, the qualifications are steep. Many in Hawaii find themselves adjusting their career goals to match the cost of living, sometimes sacrificing passion for practicality.

“It’s challenging deciding what you want to do, as far as a career goes in Hawaii; you may have to go beyond [the] things you really are passionate about,” he said.

Still, for Myers, Hawaii is worth it.

“Hawaii is a very culturally connected place. And for me is the place I wanted to end up,” he said. “We still have the same issues as everywhere else, but it is a geographically beautiful and very special place.”

Article Published at Mortgage Professional America 

Summary: What is a DSCR Loan?

A DSCR loan is a real estate financing option based on a property’s cash flow rather than the borrower’s income. Popular among rental property investors, DSCR loans help qualify borrowers using rental income potential. These loans are flexible, can be refinanced, and are ideal for scaling real estate portfolios.

Key Points:

• DSCR Defined: Stands for Debt Service Coverage Ratio; measures property income vs. debt.

• Eligibility: Based on property cash flow, not borrower’s personal income.

• Formula: DSCR = Net Operating Income / Total Debt Service.

• Typical Requirements: DSCR ≥ 1.0, credit score in 600s, 20% down payment.

• Credit Reporting: Loans usually don’t appear on credit reports, but related activity may affect scores.

• Refinancing: Allowed, including cash-out options – evaluate for potential penalties.

• Loan Limits: No set cap on the number of DSCR loans a borrower can have.

• Myers Capital Hawaii: Offers expert guidance and DSCR loan solutions for investors.

When you want to purchase a rental property or refinance an existing loan for a rental property, one of the most important things you can do is consider your options.

There are several types of investment property loans that real estate investors could choose, with each offering something unique compared to the rest. Bridge loans, portfolio loans, and fix and flip loans are just a few examples.

Today, we’re sharing key information about another type of investment property loan. Specifically, the Debt Service Coverage Ratio (DSCR) loan.

So, what is a DSCR loan and why do they make sense as a financing option for some real estate investors? Let’s take a closer look.

The Basics on DSCR Loans

A Debt Service Coverage Ratio loan, often called a DSCR loan, is a type of financing often used for short-term rental properties, including but not limited to condotel units. DSCR loans are also used for many other types of rental properties, like traditional apartment buildings and complexes. They can be used for refinancing and for purchasing a property.

The most unique aspect of DSCR loans is the income stream used to determine a borrower’s eligibility. Many loans take the borrower’s personal income into account, drawing on documents like W2s to verify the amount of money the borrower earns.

DSCR loans offer an alternative by focusing on the property’s cash flow instead of the borrower’s income. In essence, the lender uses the expected earnings of the property to decide whether issuing the loan is in its best interest.

So, DSCR loans can be a useful and powerful option when the borrower themselves doesn’t have a high income, but the property they want to purchase shows a strong return.

How Does a DSCR Loan Work?

DSCR loans work by measuring the cash flow of a property while also taking associated debts and expenses into account. Investopedia explains that the formula for calculating DSCR for an individual property (or for a business or similar entity) is relatively simple.

The DSCR formula is as follows: Net Operating Income/Total Debt Service. Here are a few key details:

•    Net operating income is calculated by taking the gross operating revenue and subtracting operating expenses from it.

•    Debt service is calculated by adding up the principal repayment, lease payments, and interest payments.

This calculation yields a DSCR ratio. As JP Morgan Chase points out, the figure tells the lender how much income is produced per dollar of debt service. So, a DSCR of 1.65 shows that a property earns $1.65 in income per every $1 of debt service. The higher the DSCR, the more income a property earns and, generally, the more likely a lender is to approve a DSCR loan.

How to Qualify for a DSCR Loan

Every lender has their own specific rules and requirements. However, there are a few standards for DSCR loans across the industry.

These include a minimum DSCR of 1.0, a credit score in the 600s, a minimum down payment of 20%, and evidence of the property’s actual or projected income.

These standards are flexible. Some lenders may have higher requirements, while others may have lower limits or make exceptions on a case-by-case basis.

How Many DSCR Loans Can You Have?

There is no legal, regulatory, or otherwise official limit to the number of DSCR loans a borrower can have. This is another reason why DSCR loans are a popular choice among real estate investors.

Do DSCR Loans Show on Credit Reports?

DSCR loans do not rely on personal income, so they generally don’t appear on credit reports. Activities related to the loan, like a late payment or a credit inquiry by a lender, can influence credit scores, but the loans themselves do not appear on credit reports.

Can You Refinance a DSCR Loan?

Yes, like many other types of loans, borrowers can refinance DSCR loans. Refinancing a DSCR loan is a popular choice when interest rates drop significantly and refinancing can reduce the amount of interest paid. Cash-out refinancing for a DSCR loan is another approach used by some investors.

Keep in mind that refinancing a DSCR loan may also lead to prepayment penalties and other financial obligations. Just like any type of loan, it’s vital to do the math and ensure refinancing will lead to the outcome wanted and not just a greater expense in the big picture.

Help With DSCR Loans from Myers Capital Hawaii

Myers Capital Hawaii is dedicated to helping our clients understand their loan options and choose the type of financing that best aligns with their unique needs. We are happy to discuss DSCR loans and how they could fit into your investing strategy with you. Learn more about our loans for investors.

Copyright 2025: Myers Capital Hawaii 

Tariffs. A government-efficiency task force. No Tariffs. Court challenges. New tariffs. The start of the new presidential term has been unprecedented. Mortgage rates remain in the mid-6%’s, and experts now predict they won’t fall much this year.

Taking a wait-and-see approach, the Federal Reserve has paused rate drops, citing concerns about economic growth, the potential effects of policy actions under the new administration, and persistent inflation which (excluding food and energy) remains at around 3.1%, versus the Fed’s desired 2% target.

Low inventory for sale continues to be a dominant factor in market dynamics. While rates are actually only about 1% above their long-term historical average, the effect on market psychology is real. Until rates come down, the “lock-in effect” is expected to continue. “(This) effect, where homeowners are reluctant to sell due to low existing mortgage rates, will continue to constrain inventory in 2025,” said Ali Wolf, Zonda Chief Economist. Those would-be sellers are not excited about roughly doubling their mortgage rates.

This sets up a second dynamic, which is that there are still more willing buyers (despite higher rates) than there are properties. Home price increases have moderated but are still a fact in most markets. Nearly every prediction, from CoreLogic to Morgan Stanely to Zillow, expects home prices to rise 2% or more this year, and in 2026.

“If mortgage rates remain stubbornly high, we can expect a continued period of subdued home sales and price growth,” concurred Mark Zandi, Chief Economist, Moody’s Analytics. The CalculatedRisk blog reported that “sales in January, at 4.08 million on a seasonally adjusted annual rate basis were down from December and still historically low. Sales averaged almost 5.5 million (monthly, annualized, seasonally adjusted) in the January 2017-2020 period. So, sales were still about 25% below pre-pandemic levels.”

We’ll have to see what happens. If a recession unexpectedly materializes later this year, interest rates should drop and improve buying power.

At the same time, it seems unlikely that a recession would lower house prices very much, given low supply and high pent-up demand – lower rates are widely expected to bring millions of sidelined buyers back into the market.

If you’re in need of a larger home, or downsizing, fence-sitting may not be a great strategy. Financially-sound borrowers usually have an opportunity to refinance once rates move down.

And if you’re like others who plan to sit tight, tapping into equity to improve your home may also be a great move, and we can help with that too.  

Either way, let’s put a plan in place to help you pursue those dreams!

Copyright © 2025 Myers Capital Hawaii  

Mortgage News and Updates – Spring 2025
Get the latest mortgage industry news. Click here.

– Economy & Mortgages: Tariffs, Inflation, and the Fed: What’s Next for Mortgage Rates
– What is NMLS all about?
– How to Access Equity without Letting Go of a Good Thing.
– What are Involuntary Property Liens?
– What’s an Appraisal Gap? (And How Not to Fall Into It!)

Economy & Mortgages: Tariffs, Inflation, and the Fed: What’s Next for Mortgage Rates

What is NMLS all about?

You likely know the “MLS” is a service listing current homes for sale. What, though, is the NMLS? It’s only different by 1 letter, after all! Meet the “Nationwide Multistate Licensing System.” Not a listing of homes for sale, but an important consumer resource — an online platform used by states to manage licenses for mortgage loan originators and lenders.

Created in response to certain practices that contributed to the financial crisis of 2007-2010, it allows individual mortgage professionals and businesses to apply for, renew, and manage their licenses across multiple states through a single national system.

Consumers can use the NMLS website to check the licensing status of mortgage entities and individuals to verify who they are, their office location, and what states they’re licensed in.

Complaints can be filed there too. Check on us anytime!

How to Access Equity Without Letting Go of a Good Thing

Like many, you may be planning to stay put in your current home and make upgrades which will support various needs or goals.

As homes age, they routinely need renovation, whether to update outdated features (those old tile countertops), or repair/replace features that are losing functionality (that wood-burning fireplace with the cracks showing in the mortar).

Other homeowners want to add an additional dwelling unit (ADU) to their property, for an aging parent or a renter. Still others want to consolidate higher interest loans, like credit card debts, into a more affordable loan.

To get at that equity, there are 3 time-tested approaches.

Cash-Out Refinance: These have long been an option if your home has risen in value: refinance to a lower rate and a larger mortgage, keeping your payment about the same, you can get lump-sum cash out instantly. However, If your current record low rate makes that refinance unattractive, you have company! It’s estimated that over $32 trillion of home equity is “trapped” behind low-rate first-lien mortgages. Read on!

Home Equity Loan: These are second mortgages that are most suitable for dealing with one-time, large expenses like paying off other debts that have higher interest rates (auto, educational, medical, credit card, etc).

All the money is provided up front, and you begin paying interest on that full amount immediately. The rate is fixed, and you repay it in predictable, fixed monthly installments over a set period, just as with your primary mortgage.

Since it’s secured by your home, it’s usually at a lower rate than many other types of debts. Depending on the exact program, you could borrow a significant amount of the equity in your home (in some cases, up to 90%).

Home Equity Line of Credit (HELOC): These loans are most suitable when you need money periodically for ongoing projects or expenses. You can withdraw funds as needed during a “draw period,” which typically lasts ten years. Borrow only what you need, when needed, not up front.

It can be paid down, and reborrowed while you’re in the draw period. It’s effectively a revolving line of credit, like a credit card, but secured by your home, so the rates on outstanding balances are much, much lower. Interest is paid only on the amount borrowed.

The rate on the HELOC varies with the market, since you are in control of when the funds are accessed. Some people set up HELOC’s as a “safety net” for a future need, including emergencies. You never know when it could come in handy, and getting a loan during an emergency (i.e., job loss, health crisis) could be difficult.

A Note of Caution: You may also hear about “equity sharing” options, where private companies will provide cash with no payments due, in exchange for a portion of the equity on your home at some point in the future or based on a triggering event (like when you sell or refinance). If that raises a red flag, it probably should.

These are less straightforward than the three traditional options above, can be difficult to evaluate, and in some cases cannibalistic to the equity stake you are left with in the end. Talk to us for a second opinion before pursuing one of these.

We can help you make the right call, and find an equity loan or line of credit that works for you. We help you evaluate the usage of funds, repayment plans, cash flow needs, and time horizons in finding the right options for your needs.

What are Involuntary Property Liens?

A property lien is a legal claim that a creditor asks a county recorder to place against a property to recover debts from a property owner. Liens can apply to houses, cars, boats, and other real estate. There are two types: voluntary and involuntary.

In signing for your mortgage, you (voluntarily) agreed to have a “voluntary lien” applied to your property. When you pay off your mortgage, the lien is cleared, and off you go. If you fail to pay your mortgage, the lien gives that lender the right to repossess your property. Same with cars and boats.

What is an Involuntary Property Lien?

An involuntary lien is one you didn’t agree to up front. Good news: most creditors can’t place an involuntarily lien on your property – – an example being your credit card lender. Credit card debt is “unsecured”, meaning they can’t come after your house if you don’t pay (which is why credit card rates are so high instead).

However, there are other debts where the agency or creditor is legally allowed to place an involuntary lien on your property. Common ones are:

• Property tax lien: Issued by state or local governments for unpaid property taxes.

• Federal tax lien: The IRS places a lien due to unpaid federal taxes.

• Homeowners Association (HOA) lien: HOAs can typically place a lien for unpaid HOA fees.

• Mechanics lien: Contractors can place a lien for unpaid invoices. Contractor disputes can sometimes go unresolved, and later the homeowner discovers a mechanics lien when they try to sell.

• Judgment lien: Plaintiffs in lawsuits and debt collectors can file a judgment lien for the amounts due.

In most states, you can find out if there is a lien on the property by contacting your county recorder or assessor’s office. When selling or buying a home, a title search will check for any outstanding liens, and any “clouding” of the title must be resolved before closing.

You can avoid involuntary liens by staying current on taxes, contractor payments, and judgments. If you can’t stay current, find out if a payment plan is an option.

If you do end up with an involuntary lien, and you get it paid off, be sure to have the lien holder sign a release-of-lien form and submit it to the local government office.

If you are struggling to clear a lien, an attorney can help. We can connect you with the right attorney who can help resolve your situation.

What’s an Appraisal Gap? (And How Not to Fall Into It!)

The hyperactive pandemic real estate market, with low interest rates and skyrocketing prices, saw a boom in the occurrence of appraisal gaps, where a house’s appraised value (often based on recent sales only a few weeks old) still falls well short of the agreed-upon sales price. Today, the market is certainly less frothy, but the low inventory situation is still resulting in buyers resorting to escalation-clauses that lead to bidding wars, especially for the most desireable homes (starter homes) — and thus appraisal gaps are still prevalent.

In order to support the final mortgage amount, an appraisal is typically performed after the sales price is agreed upon. An appraisal gap can result in a higher loan-to-value ratio (if the borrower can qualify), or having to bring extra cash to the table to cover the gap and keep the anticipated mortgage structure the same. The borrower is to some degree “stuck” unless they plan ahead!

One solution in bidding on a house is a contingency clause (or form) where the buyer caps the additional amount they can bring to the table if the appraisal comes in low, and allows an exit if it exceeds the threshold. It’s a great solution but involves some math related to the mortgage.

We can help you determine the right amount to put in this contingency/exit strategy, such that you have a competitive offer, enough cash to cover closing costs, and don’t get caught by a gap you can’t manage through. Lean on our expertise, if you’re considering a purchase!

Copyright © 2025 Myers Capital Hawaii 

Financial markets value certainty. Regardless of which party controls the White House or Congress, putting the election behind us gives markets a clearer view of the economic policy ahead. Although a certain amount of uncertainty (pun intended!) does still surround things, the prospects of a housing-friendly regulatory environment have the industry cautiously optimistic.

Mortgage rates have been bumping along in the mid-6’s with the markets reacting one way or the other to economic news of the day. The Fed, jobs, unemployment numbers, inflation, and even the impact of potential tariffs on our trading partners (or is it all posturing?).

On the economic front, the picture is mixed. Payroll job gains are solid, though concentrated narrowly in a few sectors. At the same time, unemployment is rising, now above 4%, with more households reporting long-term unemployment and the hiring rate on the decline. If you have a hard time seeing how both are possible at once, you’re not alone.  

This mix of conditions makes it difficult to predict exactly where rates are headed. Our take is that as long as inflation doesn’t head in the wrong direction (upward), the Fed may continue its cautious rate-cutting plans into 2025. Don’t expect huge changes though in mortgage rates – – we’re probably going to live with rates in the 6.25% – 5.75% range during 2025. Still, that should yield a gradually improving housing market.

Housing inventory continues to struggle to catch up to demand for homes. Housing starts in October were 3.1% below September and 4.0% below starts in October 2023. Existing home sales in October, benefitting from a dip in mortgage rates that started in the Summer, increased year-over-year for the first time since July 2021, but at 3.96 million on a seasonally adjusted annual rate basis, were still historically low.

On a positive note, we’re seeing some loosening in the average mortgage rate “lock-in effect,” where homeowners with low-rate loans stay in their homes because they can’t give up that great rate. While it’s welcome news, the additional homes for sale of course still won’t accommodate our unmet housing demand, so prices should stay firm.

The rule of thumb continues to be that if you’re considering a purchase, waiting may not yield a better result. We have programs for all types of borrowers that help them take advantage of opportunities that exist in the market today – and great opportunities can be found in all types of markets. Let’s connect to discuss your goals, and we’ll put together a winning financing plan!

Copyright © 2025 Myers Capital Hawaii 

Mortgage News and Updates – Winter 2024
Get the latest mortgage industry news. Click here.

– Economy & Mortgages: Mortgage Rate Outlook – Gradual Normalizing Continues

– Is AI taking over mortgage lending yet?

– If the Fed is easing rates, why are mortgages not exactly following?

-Inheriting a house with a mortgage. What to consider.

-What’s Mortgage Protection Insurance and Do You Need It?

Economy & Mortgages: Mortgage Rate Outlook 2025 – Gradual Normalizing Continues

Is AI taking over mortgage lending yet?

The mortgage business has been automating steadily for years, and as Artificial Intelligence (AI) becomes more powerful, there exists a potential to help lenders achieve faster, more data-driven results. Already, our tools are able to collect and analyze your financial data, and can automate many routine underwriting steps, speeding up initial risk assessments and approval decisions, and reducing costs.

But AI falls short for now because mortgage scenarios can be amazingly complex, involving dozens of potential loan program solutions, unique borrowers, property valuations, and credit histories. It’s a heavy lift to develop the “training data” needed to build an effective AI solution. The industry is getting there, but for now, the human touch is still required for a good portion of the more nuanced work.

While AI will eventually take on larger roles within the mortgage business, for now, you’re in good hands with our expert team of humans!

If the Fed is easing rates, why are mortgages not exactly following?

I have been fielding calls over the last few months from clients who are wondering why, when the Fed has eased interest rates, mortgage rates have actually risen again after a brief dip over the summer. Great question!

To answer this, first know that the Federal Reserve (Fed) doesn’t directly set mortgage rates. Its mission today is battling inflation and keeping the economy out of a recession.

Indeed, the Fed can influence mortgage market rates by expanding or shrinking its balance sheet, buying and selling huge batches of government securities in the open market, as it did during the financial meltdown / Great Recession 15 years ago.

While that’s an example of how Fed actions can indirectly affect mortgage rates, clearly there must be other factors involved!

Federal Funds Rate:

The Fed sets the federal funds rate, which is the interest rate banks charge each other for very short-term (overnight) loans, as banks manage their daily cash flow. Mortgages, being longer-term debts, track more closely to the 10-year Treasury bond rates, which the Fed does not manage.

You can see this in the chart here – – note how mortgage rates track pretty closely to the long bond (10-year bond). Changes to the federal funds rate do make it more or less expensive for banks to borrow money. But it takes months for such changes to work through the financial markets and impact long-term bond rates.

Open Market Operations:

The Fed can buy or sell securities (like Treasury bonds) in the open market. You may recall “quantitative easing” being a part of the Fed’s response to the housing market crash around 2008. The Fed purchased over $1.5 Trillion of mortgage-backed securities, hugely expanding its own balance sheet.

By effecting massive demand for these securities, their price rose. In the inverted world of debt instruments, this lowered mortgage rates to help homeowners. Then it did so again in response to COVID-19, buying over $1T more! More recently the Fed has been trying to “unwind” its stuffed balance sheet by selling off debt, at lower prices, leading to (eek!) higher interest rates. Of course it has to try to do this carefully, or risk sending the economy into a recession. What a tightrope!

Mortgage rates have risen recently because other economic factors also have a powerful influence. Persistent inflation tends to devalue debt, since a dollar repaid in the future is worth less! That pushes down bond prices, and bond yields (interest rates) go up. Strong economic performance has the same effect. The bond market is focusing on these factors as they consider the prices they’ll pay for long-term debt securities.

In sum, while the Fed strongly influences financial markets, its monetary policy actions only indirectly influence the markets for longer-term bonds that directly impact mortgage rates. Contact us for a more detailed discussion, and my thoughts about where rates may go from here!

[Data: Federal Reserve Bank of St. Louis]

Inheriting a house with a mortgage. What to consider.

Inheriting a house that’s not yet paid-in-full is becoming more common. Homes have become more expensive to start with, and mortgages are effectively outliving borrowers in many cases.

Additionally, many seniors have purposely tapped built-up equity for “aging in place” improvements that allow them to stay put longer, for medical expenses, and for other needs. This leaves them with mortgage debt — all for very good reasons, of course!

Given the price of homes, keeping a house within the family as one generation passes can give the offspring a leg up in terms of continuing to build real estate wealth. It’s not uncommon for children or grandchildren to get a start in real estate by inheriting a house.

If you find yourself inheriting a house, you have a few options:

-Sell the house: The first decision to make is whether to keep the house. If no one is planning to live in it, you could sell the house. This solves the mortgage problem. It would be paid off out of the sale proceeds, and you’re done. If the debt exceeds the value of the house, in many jurisdictions heirs are not responsible for a mortgage shortfall (speak with your mortgage attorney!).

-Move in / keep the mortgage: Many mortgages have a “due on sale” clause, and if you don’t occupy the home, it gets triggered when the title is transferred. If the borrower dies and you inherit the home and plan to occupy it, you cannot be forced to pay off the mortgage. You’d “assume” the existing mortgage, supplying the mortgage company a with a certified copy the death certificate and a copy of the deed to the home showing you as the new owner, replacing the original borrower and continuing to make the original payments.

Since you’re technically making payments for the person who is deceased (who’s on the mortgage), those payments do not go on your credit report. And if the terms of the old mortgage are better than what you can qualify for today, that may not be an issue.

Move in / replace the mortgage: If you move in and the characteristics of the mortgage don’t fit with your own financial situation, we can help you attempt to finance the home with something more appropriate.

Keep in mind that this is not a “re-finance” since you aren’t on the original mortgage. You’d have to qualify as normal for a new mortgage. Overall, the first step is to contact us. We have handled these situations over the years, and we can help you make the right moves!

What is Mortgage Protection Insurance and Do You Need It

Mortgage Protection Insurance (aka Mortgage Life Insurance) pays off your mortgage upon your death. It is a legitimate product, but do you need it? When you die, your survivors inherit your mortgage debt along with the house (see article inside about inheriting a mortgage). Mortgage protection insurance pays some or all of the loan off, leaving inheritors with less mortgage debt (or none).

Mortgage Protection Insurance has some advantages versus traditional life insurance. Many offerings are “guaranteed acceptance” policies, which helps if health conditions prevent you from getting affordable life insurance coverage. The insurance payment goes directly to the lender. Your inheritors don’t need to handle that payoff, and your heirs inherit a fully paid-off home, or at least a smaller mortgage.

However, traditional life insurance generally offers greater flexibility for those you leave behind. Traditional life insurance pays the funds to the beneficiaries, not the lender. They can use the funds to pay off debts first, or use them in other ways, if they assume or replace the inherited mortgage.

If your current insurance portfolio offers sufficient coverage, I would not recommend adding mortgage protection insurance. If you don’t have life insurance, we can help you explore this option.

Copyright © 2025 Myers Capital Hawaii