Mike’s Monthly Mortgage and Real Estate Update

Planning for the Future & Real Estate Market Updates

It’s funny how life changes as you get older. I’m approaching my 60th birthday (just a couple of months away!), and I find myself doing things I’ve never done before. I’ve been planning for retirement for over 30 years, but now, I’m looking more closely at risk management and ensuring my family is protected when I’m gone. I tell them I plan to live until 106, delaying any inheritance and hoping to motivate them to stay ambitious!

Why a Healthcare Directive & Power of Attorney Matter

If you or your adult children (18+) don’t have a trust, then at the very least, you need a healthcare directive and power of attorney (POA). Life happens, and these documents ensure your wishes are honored if you can’t make decisions for yourself.

Who Should Have a POA & Healthcare Directive?

• Adults (18+) - Once you’re legally an adult, no one (not even your parents) can automatically make financial or healthcare decisions for you without these documents.
• Married Couples - Spouses don’t always have full authority without proper paperwork.
• Parents with Children - Consider temporary guardianship documents if something happens to both parents.
• Single Adults - No automatic decision-maker unless you appoint one.
• Business Owners - If you’re unavailable or incapacitated, someone should be able to handle your business matters.
• Anyone with Assets or Medical Preferences - You need these if you want control over your finances or healthcare in an emergency.
• Older Adults/Seniors - These documents are essential, especially with aging or health concerns.
• High-Risk Lifestyles - Frequent travelers, those in high-risk jobs, or those with medical conditions should have these in place.

If you have a trust, your healthcare directive is usually included, but double-checking never hurts. And kudos to you for having a trust in place! For those who don’t have one, here is the link to the State of California website so you can protect yourself and your loved ones:

https://oag.ca.gov/system/files/media/ProbateCodeAdvanceHealthCareDirectiveForm-fillable.pdf

Real Estate Market Updates

We’re seeing the market pick up again with buyers and sellers. It’s the same story we’ve seen before: well-maintained homes with beautiful upgrades are selling quickly with multiple offers, while homes without upgrades, views, or desirable lots struggle. Price is becoming a key factor in moving those properties, and if interest rates drop, demand could shift even further.

Moving Out of State? Plan Wisely!

Every month, I help clients move to more affordable areas nationwide. Last month, I worked with a client who had some savings but no retirement or 401(k). He quit his job and wanted to buy a home in Tennessee. The problem? With no verifiable income, he only qualified for a higher-rate loan. Had he talked to me before quitting his job, we could have structured things differently and secured a much lower rate. Now, he’s waiting until October (when he turns 67) to start receiving Social Security, and we’ll hopefully refinance then.

The lesson here? Planning is everything. If you’re considering a move, talk to me first to strategize for the best possible loan terms.

The Insurance Crisis & Non-Warrantable Condos

Insurance has been an even bigger issue than interest rates this past year, killing quite a few transactions. California alone has 750 condo complexes considered non-warrantable, including about 40 in Santa Clarita and another 40 in the San Fernando Valley. Most issues stem from a lack of insurance, high deductibles, or deferred maintenance.

Non-warrantable condos come with higher interest rates and require at least 10% down (compared to the 0-3-5% down for standard conventional loans). The good news? Some HOAs are finally correcting their insurance issues, and costs aren’t as bad as many expect. If you own a condo and are facing financing challenges due to HOA insurance, let’s talk - I can help explore options.

Interest Rates & The Weird Economy

Interest rates hit a low point in early March but crept up each week until last Friday when they significantly dropped. The economy right now? It’s just plain weird. Egg prices are down, but eating out is ridiculously expensive. I just paid $11 for an energy drink at a hockey game! Meanwhile, fast food is somehow both cheap and expensive at the same time. (I could get a second Big Carl for just $1, but honestly, even the thought of eating one is enough for me!) We know inflation isn’t good for anyone, and we seem to be in limbo between an excellent economy and an awful one. A recession wouldn’t be great for the country, but historically, it has been good for interest rates. Ideally, we get lower rates without a recession!

Final Thoughts

That’s it from me for now! I hope you’re doing well, and as always, I’m here if you have any mortgage questions or want to refer a friend or family member my way. Have a fantastic month, and I hope to hear from you soon!