Blog – CTeBockhorst's Blog

Financing Mixed Use Properties: Live, Work, and Invest in One Place

September 23, 2025 by Coleen TeBockhorst

Mixed use properties are becoming an attractive option for buyers who want to combine residential, commercial, and investment opportunities all in one place. These properties can provide unique benefits, such as generating rental income while also serving as a primary residence. However, financing a mixed-use property requires a different approach than financing a traditional single-family home, and understanding the process is key to making the right decision.

Understanding Mixed Use Properties
A mixed use property is one that blends both residential and commercial space within the same building. For example, you might live on the upper floor while renting out a storefront or office on the ground level. This type of property can offer convenience, additional income, and potential long term value growth.

Financing Options Available
Financing a mixed-use property is often more complex than obtaining a traditional mortgage. Lenders evaluate these properties differently, taking into account both the residential and commercial aspects. Some lenders may offer conventional financing if the majority of the property is residential, while others may require commercial loans if the commercial space is larger. Loan terms, interest rates, and down payment requirements can vary, making it important to shop around for the right lender.

Benefits of Mixed Use Investments
One of the biggest advantages of owning a mixed-use property is the opportunity to generate rental income while also reducing personal living expenses. Owners can live in one portion of the property and rent out the rest, creating a steady revenue stream that can help cover mortgage payments and other expenses. Additionally, mixed use properties are often located in high demand areas, which can lead to long term appreciation and increased property value.

Challenges to Consider
Despite the advantages, there are challenges that come with mixed use properties. Financing may require larger down payments or higher interest rates. Managing both residential and commercial tenants can be more demanding, and zoning regulations or property restrictions may apply. It is important to carefully evaluate whether the potential income and lifestyle benefits outweigh the additional responsibilities and risks.

Mixed use properties offer a unique blend of lifestyle and investment potential. By understanding how financing works, weighing both the benefits and challenges, and working with experienced professionals, you can decide if this type of property fits your financial goals and long-term plans.

What’s Ahead For Mortgage Rates This Week – September 22nd, 2025

September 22, 2025 by Coleen TeBockhorst

It has been a relatively light week following the recent rate changes, as the Federal Reserve has felt the need to drop the current rate by 25 basis points. They have also mentioned the possibility of two additional rate cuts within this year. This follows the recent sharp criticism from the current administration, which condemned the Federal Reserve’s insistence on maintaining existing interest rates.

This development coincides with the Leading Economic Indicators, which have shown that the U.S. economy remains in decline, a trend that began in August. With further rate cuts on the horizon, the broader market reaction has been a positive one.

Consumer Price Index
The Federal Reserve cut its benchmark interest rate by 25 basis points today, the first rate move since last year, as it penciled in two more reductions for this year.

Leading Economic Indicators
US declined by 0.5% in August 2025 to 98.4 (2016=100), after a small 0.1% increase in July (upwardly revised from an originally reported 0.1% decline). The LEI fell by 2.8% over the six months between February and August 2025, a faster rate of decline than its 0.9% contraction over the previous six-month period (August 2024 to February 2025).

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.09% for this week, with the current rate at 5.41%
• 30-Yr FRM rates saw a decrease of -0.09% for this week, with the current rate at 6.26%

MND Rate Index
• 30-Yr FHA rates saw an increase of 0.03% for this week. Current rates at 6.03%
• 30-Yr VA rates saw an increase of 0.04% for this week. Current rates at 6.05%

Jobless Claims
Initial Claims were reported to be 231,000 compared to the expected claims of 240,000. The prior week landed at 264,000.

What’s Ahead
U.S. Employment data is set to land next week, with the S&P Final Manufacturing PMI estimates to round up before the end of the year.

Myths About Mortgages That Still Fool Homebuyers

September 19, 2025 by Coleen TeBockhorst

Buying a home is one of the biggest financial decisions most people will ever make, and the mortgage process can feel overwhelming. With so much information available, it is easy for myths to spread, and many homebuyers still believe ideas that are simply not true. Clearing up these misconceptions can make the path to homeownership less stressful and much more successful.

Myth One: You Need Perfect Credit

A common belief is that only people with flawless credit can qualify for a mortgage. While strong credit helps secure better rates, many loan programs exist for borrowers with less than perfect scores. Lenders look at the overall financial picture, including income, employment history, and debt, which means options are available even if your credit is not ideal.

Myth Two: You Must Have a Large Down Payment

Another myth is that you need 20 percent down to buy a home. Although putting more money down can reduce monthly payments and avoid mortgage insurance, there are many programs that require far less. Some allow as little as three percent down, while others assist qualified buyers with down payment support, making homeownership more accessible than many realize.

Myth Three: Renting Is Always Cheaper

Some buyers believe renting is the more affordable option, but this is not always true. Rent often increases over time, while a fixed rate mortgage offers stable monthly payments. Homeownership also builds equity and can provide long term financial advantages that renting cannot match.

Myth Four: You Cannot Pay Off a Mortgage Early

Many people think they are locked into a 30-year mortgage with no flexibility. Most loans allow extra payments toward principal without penalties. Paying a little extra each month or making occasional lump sum payments can reduce interest costs and shorten the loan term.

Understanding the truth behind these common myths can make homebuyers feel more confident and prepared. By separating fact from fiction, buyers can make smarter choices, explore all available options, and move forward with clarity on the path to owning a home.

Deciding Whether to Pay Extra Toward Principal or Save for Other Investments

September 18, 2025 by Coleen TeBockhorst

When it comes to managing your mortgage, one of the most common questions is whether to put extra money toward paying down the loan principal or to save that money for other investments. Both choices have advantages, and the right decision often depends on your goals, financial situation, and comfort with risk.

The Case for Paying Extra Toward Principal

Making additional payments directly to your mortgage principal reduces the amount of interest you pay over the life of the loan. Even small extra payments can shorten your mortgage term and save thousands of dollars on interest. For many homeowners, this approach provides peace of mind and a guaranteed return, since reducing debt always improves financial security.

The Benefit of Saving for Other Investments

On the other hand, investing outside of your mortgage may allow your money to grow at a higher rate than your mortgage interest. Retirement accounts, stock market investments, or even building an emergency fund can offer greater flexibility and potential for long term wealth. For borrowers with low interest rates, the opportunity cost of tying up money in the mortgage may outweigh the guaranteed savings.

Balancing Both Approaches

For many families, the best option is not an either-or choice but a balance. Contributing some extra funds toward the mortgage while still investing in retirement accounts or savings goals can provide both security and growth. This blended approach allows you to reduce debt while also building wealth for the future.

Deciding between paying extra toward your mortgage or saving for investments comes down to priorities. If you value financial certainty and want to become debt free sooner, paying extra toward the principal may be best. If you are focused on long term growth and maximizing returns, investing may be the smarter move. In many cases, combining the two strategies can give you the best of both worlds.

How Borrowers Can Benefit from Inflation with the Right Mortgage

September 17, 2025 by Coleen TeBockhorst

Inflation is a topic that impacts nearly every part of the economy, from the cost of groceries to long term financial planning. For homeowners and those considering a mortgage, inflation can feel intimidating. However, with the right perspective and strategies, borrowers can use inflation to their advantage and create lasting financial benefits.

Understanding the Relationship Between Mortgages and Inflation

Inflation reduces the purchasing power of money over time. While this can make everyday expenses higher, it also works in favor of borrowers with fixed rate mortgages. Since the mortgage payment stays the same each month, the real value of that payment decreases as wages and prices rise. In other words, the loan feels more affordable as time passes.

The Benefit of Fixed Rate Mortgages

One of the clearest ways to benefit from inflation is by choosing a fixed rate mortgage. Unlike adjustable-rate loans, fixed rate options lock in the interest rate for the entire term. As inflation increases, homeowners with fixed mortgages enjoy stable payments while renters often face rising rents. Over the years, this stability can free up more of the household budget for savings, education, or other investments.

Building Equity Faster

Inflation can also accelerate the growth of home equity. As home values rise along with inflation, homeowners often see their property appreciate. While the mortgage balance gradually decreases with each payment, the value of the asset typically grows, creating a stronger financial position. For families, this can mean greater security and more options for the future.

Protecting Long Term Wealth

Real estate has long been considered a hedge against inflation. By owning a home with a stable mortgage, borrowers can protect themselves from some of the challenges that rising costs bring. Monthly payments remain consistent, while the property itself may increase in value over time, helping homeowners preserve and even grow their wealth.

Inflation can create challenges in daily life, but it also presents an opportunity for homeowners. By securing a fixed rate mortgage and thinking long term, borrowers can position themselves to benefit as inflation reduces the real cost of their loan and increases the value of their property.

How Parenthood Changes Mortgage Needs and Housing Priorities

September 16, 2025 by Coleen TeBockhorst

Becoming a parent is one of life’s most exciting milestones. Along with the joy and responsibility of raising children, many families find that their housing needs and mortgage priorities change dramatically once little ones arrive. What may have worked for a single person or a couple often needs to be reevaluated when planning for the comfort, safety, and growth of a family.

Space Becomes Essential

One of the first priorities for parents is space. Families often seek larger homes with additional bedrooms and bathrooms to ensure that children have their own space and parents have room for future growth. An open floor plan, play areas, or even a finished basement can quickly rise to the top of the wish list as families picture years of activity, homework sessions, and holiday gatherings.

Location Takes on New Meaning

While proximity to work and entertainment might have once been the main factors in choosing a home, parents often focus more on the quality of local schools, safety of the neighborhood, and access to parks, daycare centers, and medical facilities. The right location becomes just as important as the house itself, providing a foundation for daily life and long-term family stability.

Financial Stability Matters More

Parents may look for mortgages with predictable payments, such as fixed rate options, to create stability in their budgets. With the added expenses of childcare, education, and family activities, many parents want to make sure their mortgage aligns with a comfortable monthly payment that leaves room for savings and emergencies. Some families may also explore mortgage products that allow for future flexibility, especially if one parent plans to pause their career or if the household income changes.

Planning for the Long Term

Another important factor is the long-term view of homeownership. Parents often think beyond the immediate present, considering how their home will serve their family over the next decade or longer. Questions like “Will this home grow with us?” or “Is this neighborhood somewhere we want to stay for years?” become central to the decision-making process.

The Big Picture

Ultimately, parenthood changes how families think about housing and mortgages. It shifts the focus from personal convenience to creating a stable, nurturing environment for children. For many, buying a home is no longer just a financial investment but also an investment in their family’s future.

What’s Ahead For Mortgage Rates This Week – September 15th, 2025

September 15, 2025 by Coleen TeBockhorst

Both the CPI and PPI came in precisely within expectations. Under the current circumstances, there is now a very high probability that the Federal Reserve will implement a quarter-point rate cut, a view widely shared by industry analysts. There is also a strong possibility of another cut to follow.

Meanwhile, Consumer Sentiment has hit another low in the last 4 months, as many have growing concerns about the state of the job market in addition to inflation continuing to grow. It is unknown how much the rate cuts will impact inflation, but so far the Federal Reserve has managed to maintain a delicate balance.

Consumer Price Index
The cost of living rose again in August at an accelerated pace, but probably not enough to discourage the Federal Reserve from reducing interest rates next week. The latest consumer price index (the main measure of U.S. inflation) could raise questions about how aggressively the Fed cuts rates, however, in the upcoming months. The consumer price index rose 0.4% last month, the government said Thursday. That was one tick above the Wall Street forecast.

Producer Price Index
The producer price index (PPI) dipped 0.1 percent on a month-on-month basis, according to Department of Labor data — when analysts had expected a 0.3-percent increase.

Consumer Sentiment
The University of Michigan’s gauge of consumer sentiment fell to a reading of 55.4 in September, a four-month low. The worsening of sentiment was particularly strong among lower and middle-income respondents.

Primary Mortgage Market Survey Index
• 15-Yr FRM rates saw a decrease of -0.10% for this week, with the current rate at 5.50%
• 30-Yr FRM rates saw a decrease of -0.15%, with the current rate at 6.35%

MND Rate Index
• 30-Yr FHA rates saw an increase of 0.05% for this week. Current rates at 6.00%
• 30-Yr VA rates saw an increase of 0.04% for this week. Current rates at 6.01%

Jobless Claims
Initial Claims were reported to be 263,000 compared to the expected claims of 236,000. The prior week landed at 237,000.

What’s Ahead
The FOMC Rate Decision will be ahead next week, as well as the usual employment data.

Strategies to Save on Your Mortgage in a Rising Rate Environment

September 12, 2025 by Coleen TeBockhorst

When interest rates climb, homeowners and buyers alike often feel pressure on their monthly budgets. Fortunately, there are strategies that can help you save money and manage your mortgage more effectively even in a rising rate environment. By making thoughtful adjustments and using available tools, you can still work toward long term financial security.

Make Extra Payments Toward Principal
One of the simplest ways to reduce the total cost of your mortgage is by making extra payments directly toward your principal balance. Even adding a small amount each month, or making one additional full payment per year, can cut your loan and significantly reduce the interest you pay over time.

Consider Refinancing Options
If you already own a home, refinancing it to a shorter-term mortgage could help. While monthly payments may be higher, shorter-term loans often come with lower interest rates, which can save you thousands of dollars in the long run. It is important to run the numbers carefully to ensure the savings outweigh any closing costs.

Evaluate Mortgage Points
For both new buyers and current homeowners, paying mortgage points upfront can be a worthwhile strategy. This option allows you to buy down your interest rate, creating lower monthly payments and long-term savings. If you plan to stay in the home for many years, this can be a strong financial move.

Strengthen Your Credit Profile
Your credit score plays a major role in the rate you are offered. Taking steps such as paying down revolving debt, correcting errors on your credit report, and avoiding new credit inquiries before applying for a mortgage can put you in a stronger position to qualify for a better rate.

Leverage Extra Income Wisely
Unexpected financial boosts such as tax refunds, bonuses, or other windfalls can be powerful tools when applied directly to your mortgage balance. Rather than spending these funds elsewhere, applying them to your loan can accelerate your progress toward becoming debt free.

Review and Adjust Your Budget
In a rising rate environment, careful budgeting becomes even more important. Look for areas in your monthly expenses where you can adjust and reallocate savings toward your mortgage. This proactive approach helps offset the effect of higher rates and keeps your financial goals on track.

Rising interest rates do not have to derail your homeownership journey. By using these strategies, you can minimize the impact, stay ahead financially, and continue building equity in your home.

5 Key Steps in the Mortgage Underwriting Process

September 11, 2025 by Coleen TeBockhorst

Buying a home can be exciting, but it can also feel overwhelming. Understanding the mortgage underwriting process can make things a lot smoother!

What is Underwriting?
Underwriting is when lenders review your financial information to determine if you qualify for a mortgage. They check your income, assets, credit history, and the property itself to assess risk.

The 5 Key Steps

Submit Your Application
Pre-approval starts here! This tells you and your lender how much you can afford and saves time while looking for a home.
Verify Income and Assets
Provide documents like pay stubs, tax returns, bank statements, and ID. Lenders check your debt-to-income ratio and credit history to make sure you can handle the mortgage.
Property Appraisal
A professional appraisal ensures the homeís value matches the price. Condition, features, and comparable sales are all considered.
Title Search and Insurance
A title company verifies that the home is free of legal issues and provides insurance to protect both you and the lender.
Underwriter’s Decision
Decisions can be:
- Approved – You’re ready to close!
- Suspended – More info or documents are needed.
- Denied – Additional steps are required to improve your eligibility.

After Underwriting
Once approved, youíre on track for closing! The process can take a few days to a few weeks, depending on your file and the property.

Understanding underwriting helps reduce surprises and makes your homebuying experience smoother. Knowledge is power when it comes to your biggest investment!

Understanding the Temporary Rate Reduction Mortgage

September 10, 2025 by Coleen TeBockhorst

Buying a home is exciting, but the thought of monthly mortgage payments can feel overwhelming, especially for first-time buyers. One strategy to ease the financial burden is a temporary rate reduction. This type of mortgage allows borrowers to pay a lower interest rate for the first two years of the loan before it returns to the original fixed rate.

How a Temporary Rate Reduction Works
In a temporary rate reduction, the interest rate is lowered in stages during the first two years. In the first year, the borrower pays a rate typically two percentage points below the note rate. In the second year, the rate is reduced by one percentage point. By the third year, the mortgage returns to the full fixed interest rate for the remainder of the loan term.

For example, if the note rate on a mortgage is five percent, a temporary rate reduction could start at three percent in year one, four percent in year two, and five percent from year three onward. This structure helps buyers ease into their mortgage payments gradually, making the initial years more manageable.

Who Benefits from a Temporary Rate Reduction
This option can be particularly helpful for homebuyers who expect their income to increase over time or who anticipate temporary financial constraints. It also appeals to first-time buyers who want to reduce initial monthly payments while adjusting to costs like taxes, insurance, and maintenance.

How It Is Funded
The cost of the temporary rate reduction is usually paid upfront at closing. It can be covered by the seller as a concession, by the lender, or by the borrower. Essentially, this upfront payment ìpre-paysî the interest for the lower rates during the first two years, allowing borrowers to enjoy reduced monthly payments immediately.

Considerations Before Choosing a Temporary Rate Reduction
While this option can make early payments easier, borrowers should ensure they can afford the full note rate once the reduced period ends. It is also important to compare this program with other mortgage options to determine the best fit for long-term financial goals.

A temporary rate reduction can be a smart strategy for easing into homeownership and lowering initial mortgage payments. By understanding how it works and planning for future adjustments, buyers can use this tool to make the first years of homeownership more affordable and manageable.

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