Category: Mortgage (Page 1 of 64)

Lately I’ve been getting the same question in conversations with clients: “Tom, how do we make housing affordable right now?”

It’s late July 2026. The first half of the year has been tough. Things looked a little better late last year and into January, but affordability remains the dominant conversation.

I wanted to address it directly—first the things none of us control, then the things you can control starting today.

A Quick Word on Perspective

Before we dig in, let’s hold two-time horizons at once.

In the long run I do believe rates are coming down. If that’s true, today’s payment is not necessarily your permanent payment. You can refinance later, shorten the term, or increase principal payments as your income and circumstances improve.

Short-term affordability and long-term affordability are related, but they are not the same calculation. Keep both in view.

The Things You Can’t Control About Affordability

When elected officials and media talk about “making housing more affordable,” I have to be honest—I often shake my head. Not because the problem isn’t real, but because the solutions they discuss rarely touch the actual cost drivers.

• Property Taxes – A perpetual tax on an asset you already own and paid for with after-tax dollars is a strange policy. The property-tax structure is one of the biggest levers on true housing cost. If we were serious about affordability, this would be near the top of the list.
• Capital Gains – At the federal level (and in many states) the tax friction on selling a property keeps inventory locked up. Reform here would increase supply and improve market function.
• Over-Regulation of the Mortgage Industry – Yes, we need regulation. I am not arguing for a return to the pre-2008 environment. But the compliance burden that landed on mortgage companies, loan officers, and investors after the financial crisis is enormous. I spend a significant amount of time and money every year simply staying compliant. Those costs do not disappear—they get passed through to the borrower in the form of higher fees and higher rates.
• Third-party Fees – Eleven years ago a credit pull cost roughly $30–$35. Today it routinely runs $150 or more. Automated verification of employment can add hundreds more. On a recent closing I saw more than $500 in combined credit and VOE costs alone. That’s a roughly 320% Cost of Credit Inquiries – There is no competition or efficiency gain being forced into that system, so the borrower pays.

These are macro and structural issues. Outside of voting and advocating, most of us cannot change them overnight. So let’s talk about what you can control.

What You Can Control Right Now About Affordability

1. Get the right mortgage product—and the right structure.

Not every loan is the same. Conventional conforming (Fannie/Freddie), FHA, VA, USDA, and non-QM products all carry different cost structures, different mortgage-insurance rules, and different long-term implications. The term matters too.

A 29-year loan is almost always less expensive over the life of the loan than a 30-year loan, even though the monthly payment is slightly higher. Down-payment amount changes both rate and monthly cost.

Work with a loan officer who will run the actual numbers side-by-side instead of defaulting to the product that is easiest to sell.

2. Negotiate the contract like it matters—because it does.

Three, four, five years ago almost every contract I saw came in above asking price. Appraisals were routinely waived. Inspection items were often left unaddressed. The interest rate was low, so the payment looked affordable—but buyers were financing a higher purchase price and accepting more risk.

Today the rate is higher, which makes the payment feel harder. But I almost never see a contract without meaningful seller concessions. Appraisals are not being waived. Inspection issues are being negotiated and frequently repaired.

Those concessions can be used to pay closing costs, buy down the rate, or both. A skilled real-estate agent who knows how to structure the offer is one of the highest-leverage tools you have for affordability right now.

3. Be careful with down-payment assistance.

These programs can be excellent for the right buyer. They can also be expensive. In eleven years I have never seen a “grant” that truly never gets paid back in some form—either through a higher rate, a second lien, or repayment on sale or refinance.

If you need the assistance to close, use it. If you don’t, the extra cost is rarely worth it. Ask your loan officer to show you the true all-in cost before you commit.

4. Master your credit profile deliberately.

I hear this story constantly: “We paid off all our credit cards so we could buy a house.” In many cases that decision does two harmful things at once—it reduces the cash available for down payment and closing costs, and it can actually lower the credit score because of how utilization and length of credit history are calculated.

I am not advocating consumer debt. I dislike it. But before you start paying things off in the name of becoming a stronger buyer, sit down with a loan officer who has access to credit simulators.

We can model the effect of paying down one card versus another, or keeping balances where they are, against your debt-to-income ratio, available cash, and the pricing of the loan. Randomly “cleaning up” credit is one of the most common self-inflicted wounds I see.

5. Build the right team and understand their incentives.

Buying or refinancing a home is a complicated transaction. The people around you matter:

• A real-estate agent who can negotiate price, concessions, inspections, and timeline.
• A mortgage lender who will put you in the correct product and structure—not just the one that closes fastest.
• A CPA who will help you understand the tax implications.
• A financial advisor who can place real estate inside your broader plan for building wealth and legacy.

Every one of those professionals has a bias. A CPA is paid to minimize taxes. A financial advisor is often compensated for assets under management. A good loan officer is paid when the loan closes.

None of that is inherently bad—just know the incentives so you can weigh the advice!

Short-Term and Long-Term Affordability

If you cannot make the payment today, do not buy the house. That is non-negotiable.

But if the payment is workable and you believe—as decades of data support—that residential real estate remains a resilient long-term asset, then you also have tools for the years ahead: refinancing when rates allow, shortening the term as income grows, and making additional principal payments.

Affordability is not only the payment on day one. It is the total cost of ownership over the time you hold the property and the equity you build along the way.

Final Thought

As The Lending Coach, I enjoy talking to people on the phone, explaining the nuances, and helping clients make decisions that support the life and legacy they actually want. Honesty, transparency, and long-term relationships are the only way this business works for me.

If you’re trying to figure out whether a particular house or refinance makes sense in this market, do contact me. I’m happy to run the numbers, walk through the trade-offs, and help you see the full picture.

Reach out to me directly—I’d love to talk strategy and explore how we can best take advantage of market conditions to help you succeed.

As always, you can set up an appointment with me here…

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Starlight Mortgage. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.