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What’s Ahead For Mortgage Rates This Week – January 5th, 2026

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With the only notable item on the schedule being the release of the Federal Reserve minutes, which reflect the current stance of the Fed, virtually nothing has changed since the last rate cut. The Federal Reserve is expected to continue its wait-and-see approach.

Primary Mortgage Market Survey Index

  • 15-Yr FRM rates saw a decrease of -0.06% with the current rate at 5.44%
  • 30-Yr FRM rates saw a decrease of -0.03% with the current rate at 6.15%

MND Rate Index

  • 30-Yr FHA rates saw no change for this week. Current rates at 5.85%
  • 30-Yr VA rates saw no change for this week. Current rates at 5.87%

Jobless Claims

No release of data due to the holidays.

What’s Ahead

The upcoming week will feature the usual data releases, with the major ones being the Trade Deficit, Consumer Credit, and Consumer Sentiment from the University of Michigan.

Starting the New Year with Smart Home Financing

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The New Year is a natural time to pause, reset, and think intentionally about financial goals. For many buyers and homeowners, real estate and home financing are part of that plan. Whether you are considering purchasing a home, refinancing, or simply positioning yourself for future opportunities, starting the year with a clear strategy can make a meaningful difference.

Review Your Credit Early
Your credit profile plays a significant role in determining mortgage options and interest rates. The beginning of the year is an ideal time to review your credit report, address any errors, and pay down high balance accounts. Small improvements over a few months can have a noticeable impact on loan eligibility and long term affordability.

Set Clear Financial Goals
Rather than vague resolutions, set specific goals tied to your home financing plans. Buyers may focus on saving for a down payment and closing costs, while homeowners may aim to reduce debt or improve cash flow. Clear targets help create momentum and make progress easier to track throughout the year.

Understand Your Mortgage Options
Many borrowers wait until they are ready to move forward before exploring loan options. Taking time early in the year to understand available programs, rate structures, and qualification requirements allows for better planning and fewer surprises. Knowledge creates confidence and flexibility when opportunities arise.

Plan Ahead for Buying or Refinancing
Timing matters in real estate and mortgage planning. Preparing early gives you the ability to act quickly when market conditions align with your goals. Whether it is purchasing your first home, upgrading, or refinancing, having a plan in place puts you in a stronger position when the right moment comes.

Work With a Trusted Advisor
Mortgage decisions impact both short term budgets and long term financial health. Having a trusted professional to answer questions, review scenarios, and provide guidance helps ensure decisions align with your broader financial picture. A proactive approach often leads to smoother transactions and better outcomes.

Starting the New Year with smart home financing is about preparation, clarity, and confidence. If you would like to review your options or simply understand where you stand, I am always happy to be a resource as you plan for the year ahead. Wishing you a successful and healthy New Year.

Why Good Credit Score Is Not Always Enough to Secure a Mortgage

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A strong credit score gives many buyers confidence as they prepare to purchase a home. Good payment history and responsible credit use are valuable, but they do not guarantee approval. There are several other important factors that lenders review, and any one of them can slow down or stop the process.

When Your Debt Becomes a Barrier
Your credit score reflects how well you manage credit, but lenders also review how much debt you carry. High monthly obligations can limit the loan amount you qualify for, and in some cases, prevent approval. Lenders calculate your debt-to-income ratio, which is the percentage of your monthly income that goes toward paying debts. Many lenders prefer this percentage below forty-three and keeping it under thirty-six can make you a stronger candidate.

Large monthly obligations, such as high auto loan payments, can reduce your approved amount even if your credit is excellent. Too much debt can make your financial picture look stretched and increase lender concerns.

Employment Concerns That Raise Questions
Steady income matters just as much as good credit. While getting approved for a rental can feel simple, mortgage guidelines are more detailed because a home loan is a long-term commitment. Lenders usually want to see at least two years of consistent income in the same field.

If you recently started a job and have only a few paychecks, that may not be enough history. The same applies to self-employment, where lenders typically require two years of tax returns to show stable earnings. Side hustle income can be unpredictable and may not be counted at all.

Gaps in employment or frequent job changes can raise red flags, even if you are currently working. Lenders want to feel confident that your income will continue.

Limited Cash for Upfront Expenses
Many first-time buyers prepare for a down payment but are surprised by additional upfront costs. Closing costs typically total two to five percent of the loan amount. Even with great credit and strong income, limited savings can delay your plans. Without enough verified funds, moving forward becomes difficult unless you qualify for assistance or can receive a financial gift.

Paper Trail Problems
Lenders verify everything. They review income, bank statements and the source of your down payment. Every transfer, deposit and balance must be traceable. Moving funds between accounts requires statements for each one, and large deposits need documented explanations.

Cash being kept at home is a common problem. If the money has not been in your bank account for sixty to ninety days, it usually cannot be used. These strict rules help lenders ensure the funds are genuine and not borrowed at the last minute.

Understanding these factors can make the loan process much smoother. While good credit is helpful, the full financial picture matters. A knowledgeable loan professional can answer questions and guide you step by step so you can move forward with confidence.

How the Sharing Economy Is Changing Mortgage Underwriting

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The rise of the sharing economy has changed the way many people work, earn, and budget. Income from rideshare driving, freelance projects, short-term rentals, and delivery apps has become a normal part of modern finances. These new income streams are helpful for building savings and paying bills, but they also affect how lenders view your mortgage application. Understanding how the sharing economy influences underwriting can help you prepare for a smooth approval process.

Know How Lenders View Non-Traditional Income
Income from rideshare apps, delivery platforms, online marketplaces, and short-term rental hosting does not flow through a traditional payroll system. Because of this, lenders need more documentation to verify it. They want to see that your income is stable, predictable, and tied to real work, not one-time payments. If you earn through the sharing economy, tax returns, bank statements, and year-to-date income summaries become essential.

Understand the Need for a Two-Year Income History
For most non-traditional income, lenders look for at least two years of consistent earnings. This history helps them confirm that your sharing economy income is reliable. If your earnings change throughout the year, lenders will average your income to determine the amount they can use for your mortgage approval. This means the sooner you begin tracking and documenting your income, the stronger your application will be.

Keep Business and Personal Transactions Separate
One of the biggest challenges with sharing economy income is separating business earnings from personal transfers. Mixing these payments can confuse underwriters, especially if deposits look inconsistent. Opening a separate bank account for your sharing economy work helps create a clean paper trail. It makes your financial profile clearer, and it reduces the number of questions lenders must ask during underwriting.

Track Your Expenses and Deductions Carefully
Many sharing economy workers write off business expenses such as mileage, equipment, supplies, and maintenance. These deductions can reduce your taxable income, but they also reduce the income lenders can use. If your deductions are too high, your reported income may appear lower than what you actually earn. Before applying for a mortgage, review your tax returns and consider how your deductions might affect your qualifying amount.

Consider the Impact of Short-Term Rental Income
Short-term rental platforms like Airbnb and Vrbo have created new income opportunities for homeowners. Some lenders allow this income to be used for qualification, but only with strong documentation. You may need a history of rental bookings, proof of ownership, tax filings, and evidence that the property is permitted for short-term rentals. Clear records help lenders feel confident that the income will continue.

The sharing economy has opened up flexible earning options, but it also creates new considerations during mortgage underwriting. With careful documentation, clean bank statements, and long-term consistency, you can strengthen your application and show lenders that your income is reliable and stable.

How Real-Time Income Verification Is Changing Mortgage Approval

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Mortgage approval used to require weeks of gathering documents, submitting pay stubs, waiting for HR departments to respond, and hoping everything lined up perfectly. Today, more lenders are moving toward real-time income verification, a faster and more accurate way to confirm your income during the mortgage process. This shift is making the approval timeline smoother for buyers and giving lenders a clearer picture of your financial situation.

Understand What Real-Time Income Verification Means
Real-time income verification allows lenders to confirm your employment and income instantly through secure digital systems. Instead of relying on paper documents, lenders use approved payroll databases to see your income history, year-to-date earnings, and job status. This reduces paperwork, eliminates delays, and gives lenders a more accurate snapshot of your financial stability.

See How It Speeds Up the Approval Process
Traditional income verification can slow down a mortgage application, especially when employers take several days to respond. Real-time verification shortens this step significantly. With instant access to your income information, lenders can move your application forward faster. This can make a big difference in competitive markets where quick approvals help you stand out as a strong buyer.

Learn Why Accuracy Matters for Your Loan
Manual documents can lead to errors such as outdated pay stubs, missing information, or inconsistent figures. Real-time verification reduces those risks because the information comes directly from payroll systems. This accuracy helps prevent surprises, and it can reduce back-and-forth communication between you and your lender. With fewer mistakes, your approval process becomes smoother and less stressful.

Understand the Benefits for Self-Employed and Gig Workers
Not all real-time verification systems work for self-employed buyers, gig workers, or freelancers, but the industry is moving in that direction. More platforms are beginning to include income tracking for non-traditional workers, which may make future approvals easier for people who do not receive standard paychecks. As technology expands, variable-income buyers will benefit from faster and more transparent verification options.

Know How It Protects Your Loan from Delays
Because income verification is one of the most important steps in underwriting, issues with paperwork can delay closing. Real-time systems remove many of these obstacles. This helps keep your file moving, even during busy seasons, and decreases the chance of last-minute problems. Faster verification also means lenders can focus more on your full financial picture, not just paperwork.

Real-time income verification is transforming the way mortgages are approved. By making the process faster, more accurate, and more secure, it gives homebuyers a smoother experience and more confidence when moving through the loan process. As this technology continues to grow, it will make mortgage approval more accessible and less stressful for everyone.