[Gustan Cho]

Is the 1% Rule for Home Maintenance Still Enough in 2026?

Homebuyers need to look beyond the sticker price and include ongoing maintenance costs. The 1% rule is a good starting point, but I encourage you not to see it as a one-size-fits-all answer, especially as repair costs, insurance rates, property taxes, and contractor fees continue to rise.

By 2026, saving 1% to 2% of your home’s value each year for maintenance and repairs is a more realistic plan. The right amount depends on things like your home’s age, condition, location, size, and how well its main systems are working.

How Much Should Homeowners Actually Budget?

For example, consider a home valued at $400,000.

• At 1%, the homeowner should reserve approximately $4,000 annually, or $333 per month.
• At 1.5%, the maintenance reserve increases to $6,000 annually, or $500 per month.
• At 2%, the reserve increases to $8,000 annually, or approximately $667 per month.
• You probably won’t use this money every month.
• Instead, it’s smarter to save it so you’re prepared when a big repair or replacement is needed.

Why the 1% Rule May Not Be Enough

One big problem with the 1% rule is that maintenance costs don’t usually increase at the same rate as property values.

For example, a $250,000 home and a $500,000 home might need similar HVAC, roofing, plumbing, and electrical work, but the 1% rule sets aside twice as much money for the more expensive home.

Similarly, a newly built home with modern systems will probably need much less maintenance in its first years than a 40-year-old home showing its age.

I encourage buyers to carefully assess the actual condition and likely replacement costs of a home’s main components rather than relying on a percentage of the purchase price. This is especially important for first-time homebuyers.

Getting Approved for a Mortgage and Actually Affording Homeownership are Two Very Different Realities

A borrower may qualify for a mortgage based on the loan payment, property taxes, insurance, mortgage insurance if needed, and HOA fees. Regular maintenance and future repairs usually aren’t counted as separate costs in the debt-to-income ratio.

A buyer might get approved for a mortgage but still have trouble paying for unexpected costs, such as a broken furnace or a damaged roof. At Gustan Cho Associates, we emphasize knowing all housing costs and keeping savings beyond the down payment and closing costs.

For older homes, I suggest carefully checking how much life is left in the roof, the age of the HVAC system, the condition of the foundation, electrical systems, and plumbing, as well as any delayed maintenance found during the home inspection.

What I Recommend for 2026

For a newer home in good condition, 1% annually may be sufficient as a starting budget. For most older homes, I suggest setting your budget at 1.5% per year, then adjusting it as needed based on your home’s condition and any anticipated repairs.

If your property is older, has aging systems, or requires a lot of care, budgeting 2% or more may yield a more accurate estimate.

If you are a real estate investor, keep maintenance savings separate from vacancy allowances, major repairs, property management fees, and other costs. Mixing these can give a wrong picture of rental income. Maintenance savings should also be separate from emergency funds. Homeowners should keep separate emergency money for unexpected income problems and other financial issues.

Here’s My Question for Experienced Homeowners and Investors

Are you calculating maintenance reserves based on the property’s current market value, the original purchase price, or the estimated replacement costs of major components?

Clarify the 1% Rule’s Definition: Separate Maintenance From Capital Expenses.

In my view, it’s better to look at each property individually rather than rely solely on the 1% rule. I’d like to know how you calculate your savings, especially if your method accounts for major repairs, the property’s age, and local repair costs. These details are very helpful for first-time buyers trying to understand the real costs of owning a home. The 1% rule still matters, but think of it as a starting point, not a guarantee. A home that seems affordable on a mortgage calculator can quickly become a money problem if you don’t plan for maintenance and emergencies.

[Gustan Cho]

The biggest barrier for first-time homebuyers in 2026 is the following: Higher rates are causing many to be first-time homebuyers with affordability issues. Inflation is surging like a runaway freight train. A $ 100,000-a-year salary used to be considered high-end. However, many with a $ 100,000-plus salary are barely paying their bills. Most people do not have savings and are living paycheck to paycheck. Everything from fuel, groceries, utilities, and the cost of goods and services is priced out of what average consumers can afford. The combination of all these barriers is leading to many would-be homebuyers not being able to afford their first home purchase.

[Gustan Cho]

Silver Price Forecast 2026–2027: Is Silver a Great Buy Right Now?Silver Market Update: October 20, 2026

In 2026, silver experienced one of its most remarkable price swings on record. The price rose to approximately $121.79 per troy ounce in January, but by October 20, it had declined by more than 50% to around $57.77. This decline has led many investors to consider whether silver is a favorable buying opportunity or if prices may fall further. Silver has strong long-term fundamentals, including constrained supply, varied industrial applications, sustained investment demand, and its role as a precious metal. However, economic uncertainty, variable interest rates, and speculative activity add to ongoing price volatility.

I remain cautiously optimistic about silver’s outlook for 2027 and beyond. Current prices may present an opportunity for long-term investors, but I recommend accumulating silver gradually rather than making a single large investment.

What Is the Latest Silver Price in October 2026?

As of the night of October 20, 2026, silver was trading near $57.77 per troy ounce, according to Kitco’s quoted spot price. Earlier in January 2026, silver reached approximately $121.79 per ounce. The subsequent collapse represents a decline of roughly 53% from that peak.

This substantial decline illustrates the intrinsic unpredictability of silver prices, even when the long-term outlook appears favorable. Some investors see a price drop as a buying opportunity. However, lower prices do not necessarily mean silver is undervalued. Silver may recover or continue to decline before stabilizing. The key question is whether long-term demand for silver can support higher prices, even with today’s economic obstacles.

Why Have Silver Prices Dropped So Much in 2026?

Several economic and financial developments have contributed to silver’s decline.

Higher Interest Rates Are Putting Pressure on Silver

Silver does not pay interest or dividends. When investors can earn yields from Treasury securities and other interest-bearing investments, precious metals become less appealing to some market participants. If the Federal Reserve maintains higher interest rates or tightens monetary policy further, it can put pressure on silver prices. Higher borrowing costs may also slow business investment and economic growth, thereby reducing demand for industrial metals.

A Stronger U.S. Dollar Makes Silver More Expensive

International silver prices are generally quoted in U.S. dollars. When the dollar strengthens against other currencies, silver becomes more expensive for foreign buyers. This can reduce international demand and help to lower prices.

Conversely, a weakening dollar can support precious metals by making them relatively more affordable for buyers outside the United States.

Speculative Investors Have Been Selling Silver

Silver’s extraordinary rally earlier in 2026 attracted speculative investors looking to profit from rapidly rising prices. When prices began falling, some investors liquidated their positions. Leveraged traders may also have faced margin calls, forcing additional selling. This selling can accelerate a market correction and sometimes push prices below what long-term fundamentals suggest.

Can Reduce Industrial Silver Demand

Unlike gold, which is primarily purchased for investment, jewelry, and reserve purposes, silver has substantial industrial applications.

Silver is used in electronics, solar panels, electrical equipment, and automotive manufacturing. If the economy slows, manufacturers may reduce production and silver purchases. Concerns about industrial demand can put downward pressure on prices. However, during cyclical corrections, silver maintains attributes that could support higher prices in coming years.

The Global Silver Market Continues to Experience Supply Deficits

One of the most compelling arguments for owning silver is the imbalance between global supply and demand. The Silver Institute has projected that the global silver market will experience its sixth consecutive annual supply deficit in 2026. Its forecast indicates an annual shortage. A supply deficit occurs when demand surpasses newly available supply, requiring use of existing inventories to meet demand. This is especially significant if above-ground inventories become harder or more costly to access. But a shortage does not mean prices will rise immediately. Investor sentiment, interest rates, and industrial demand can impact prices more than supply for extended periods.

Long-Term Outlook

Silver possesses excellent electrical conductivity, making it valuable in numerous industrial and technological applications. Solar energy installations, electronic components, electric vehicles, electrical infrastructure, and data centers all represent potential sources of silver demand.

Artificial intelligence infrastructure and ongoing electrification also drive silver demand. However, technological advances may reduce the amount of silver needed per product by enabling more efficient use of silver. As a result, increased production of solar panels or electric vehicles does not necessarily lead to a proportional rise in silver consumption.

Silver Could Benefit From Lower Interest Rates

If inflation moderates and the Federal Reserve eventually begins reducing interest rates, silver could benefit.

• Lower interest rates generally reduce the opportunity cost of holding precious metals.
• A declining dollar could provide additional support.
• Nevertheless, the Federal Reserve’s future actions remain uncertain, and investors should not assume interest rate reductions will occur within a specific timeframe.

Silver Price Forecast for the Remainder of 2026

My near-term outlook for silver is cautious. After declining more than 50% from its January peak, silver could see sharp rebounds driven by bargain hunting, short covering, or renewed investor interest. However, such rebounds do not necessarily indicate the beginning of a sustained long-term upward trend. For the remainder of 2026, I would watch the $50- $ 60-per-ounce range closely.

• A sustained move above $60 could improve sentiment, particularly if accompanied by stronger physical demand and a weaker dollar.
• A decline below $50 would suggest that the correction has not ended and could encourage additional selling.
• These levels serve as potential investment planning zones and represent possible reference points rather than confirmed support or resistance levels.
• Several financial institutions have published silver forecasts above the October 20, 2026 market price.
• J.P. Morgan has projected approximately $63 per ounce for the fourth quarter of 2026 and an average of approximately $63 in 2027.
• HSBC previously forecast an average silver price of approximately $68 per ounce for 2027.
• UBS has published more bullish targets, including approximately $75 at times.
• These projections were issued at different times and are based on differing assumptions.
• They do not represent guarantees or consensus among all institutions.

Bearish Silver Forecast: $40 to $50 Per Ounce

In a bearish scenario, silver could decline toward $40-$50 per ounce. This could happen if the Federal Reserve maintains restrictive monetary policy, the dollar strengthens further, or industrial demand weakens considerably. Another possibility is that investors continue unwinding speculative positions following the extraordinary price increases earlier in 2026. A severe economic slowdown could also put pressure on silver, given its sensitivity to economic cycles. Investors should recognize that silver prices could decline further, despite having already lost more than half of their peak value.

Base-Case Silver Forecast: $60 to $75 Per Ounce

My base-case scenario places silver between approximately $60 and $75 per ounce during 2027. This assumes the market gradually stabilizes, investment demand improves, and persistent supply deficits help support prices. In this case, silver would bounce back from today’s prices but might not reach the high levels of January 2026. It could represent an increase of approximately 30%. This is a plausible recovery scenario, though it does not guarantee a specific return.

Bullish Silver Forecast: $85 to $100 or Higher

A stronger bullish scenario could push silver toward $85 to $100 per ounce or higher during 2027. Such an advance would likely require several favorable developments occurring together. These could include lower real interest rates, a weaker U.S. dollar, improving investment demand, resilient industrial consumption, and tighter inventories. Renewed investor enthusiasm could accelerate gains, particularly because silver is a smaller and often more volatile market than gold.

Reaching $100 would require an increase of about 100 percent. This outcome is ambitious and should be viewed as an optimistic scenario rather than the most probable result.

I believe silver deserves consideration as a long-term investment at approximately $55 to $60 per ounce, particularly for investors with a three- to five-year investment horizon. However, I would not recommend allocating a substantial portion of available investment capital to silver at a single price. Purchasing silver in smaller amounts over time can help reduce the risk of investing all funds just before another decline.

For example, an investor interested in allocating $10,000 to silver might initially invest a portion of that amount and retain the remainder for future purchases. If silver declines, additional purchases could lower the average acquisition cost.

Will Silver Be a Better Buy Below $50?

Silver below $50 per ounce could represent a more attractive opportunity. However, price alone should not justify investing. If silver declines due to weakening industrial demand, persistent inflation, or deteriorating financial conditions, a lower price may reflect a substantive change in fundamentals. Investors should carefully evaluate the causes before committing additional capital.

What Could a $10,000 Silver Investment Be Worth in 2027?

Consider an investor who purchases $10,000 worth of silver at $57.77 per ounce. Ignoring transaction costs, dealer premiums, and storage expenses, that investor would acquire approximately 173.1 ounces.

• If silver rises to $63 per ounce, the investment would be worth approximately $10,905, representing a gain of about $905.
• If silver reaches $75 per ounce, the investment would increase to approximately $12,983, generating a profit of about $2,983.
• If silver reaches $100 per ounce, the investment would be worth approximately $17,310, representing a gain of about $7,310.
• If silver declines to $40 per ounce, these examples show that investing in silver can offer substantial rewards but also involves considerable risks.
• Real returns depend on factors such as purchase premiums, selling costs, fees, taxes, and whether you buy physical silver or a financial product.

Is Silver a Better Investment Than Gold?

Silver and gold are both precious metals, but they serve somewhat different investment purposes. Gold is generally viewed as the more established defensive asset. Central banks hold substantial gold reserves, and gold has a long history of serving as a store of value.

Silver also has monetary and investment characteristics, but industrial consumption plays a much larger role in determining its market value. During periods of rising precious metal prices, silver may outperform gold.

Conversely, in declining markets, silver often experiences sharper losses. For those focused on wealth preservation during economic uncertainty, gold may be the more suitable core holding. Some choose to hold both metals to balance differing risk and return profiles. There are several ways to invest in silver, each with different advantages and risks.

Physical Silver Bars and Coins

Physical silver offers direct ownership of a tangible precious metal. Investors can purchase silver bars, rounds, or government-minted bullion coins through established precious-metal dealers. The main downsides are dealer premiums, storage costs, insurance, and the difference between buying and selling prices. Physical silver may be particularly appealing to investors interested in long-term ownership rather than frequent trading.

Silver Exchange-Traded Funds

Silver exchange-traded funds provide market exposure without requiring investors to own silver. Investors should evaluate fund expenses, liquidity, custody arrangements, fees, ease of trading, storage methods, and whether the fund holds physical silver or uses financial contracts.

Silver mining companies offer another way to participate in rising silver prices. However, mining stocks entail additional risks, including management decisions, production costs, debt levels, operational challenges, and political developments in mining regions. For this reason, mining stocks should not be considered equivalent to owning physical silver on several important developments.

• Federal Reserve policy will remain especially significant because interest rates influence the appeal of precious metals.
• Inflation data and the direction of the U.S. dollar will also affect investor sentiment.
• Physical silver supply, mine production, recycling, and available inventories will help determine whether projected market deficits continue.
• Industrial demand from electronics, energy, automotive manufacturing, and technological infrastructure will influence longer-term consumption.

Finally, investment flows into silver are important. Evaluating these factors together provides a more comprehensive understanding of silver’s future prospects than relying on a single price forecast? Silver could return to $100 per ounce, but there is no reliable way to determine whether that will occur in 2027 or later. A sustained rally would likely require stronger investment demand, favorable monetary conditions, and continued tightness in the physical silver market.

Is Silver Undervalued at $58 Per Ounce?

Silver is substantially cheaper than its January 2026 peak, but that does not mean it is undervalued. Determining fair value requires evaluating supply, demand, interest rates, inventories, and investor expectations.

Could Silver Fall Below $50 in 2027?

Yes. Silver could fall below $50 if interest rates remain elevated, the U.S. dollar strengthens, industrial demand weakens, or speculative investors continue selling.

Is Silver a Good Investment for the Next Five Years?

Silver could be attractive over the next five years due to its industrial applications and limited growth in supply. Nevertheless, its volatility makes it more suitable for investors who can tolerate significant temporary losses.

Should I Buy Silver Now or Wait for a Lower Price?

Gradually purchasing silver may be preferable to trying to identify the exact market bottom. Investors should consider risk tolerance, investment horizon, and portfolio exposure before deciding how much to allocate.

Is It Better to Buy Silver Bars or Silver Coins?

Silver bars generally offer lower premiums per ounce when purchased in larger quantities. Recognized bullion coins may offer advantages in resale convenience and market familiarity. The best choice depends on dealer pricing, liquidity, and storage preferences. Silver’s significant rise and subsequent decline in 2026 may present an opportunity for long-term investors.

As of October 20, silver traded at approximately $57.77 per ounce, more than 50% below its January peak. Persistent supply shortages, strong industrial demand, and potential changes in monetary policy provide reasons for optimism. I anticipate silver could trade between $60 and $75 in 2027, with a more optimistic scenario reaching $85 to $100. However, a further decline to $40–$50 remains possible. If you are considering investing in silver, I recommend a steady, long-term approach rather than attempting to time the market. Gradually building your position, maintaining liquidity, and avoiding excessive concentration in a single commodity can help manage risk. While silver may offer considerable potential, it remains a volatile investment and should not be viewed as a guaranteed path to wealth.

https://www.youtube.com/watch?v=Ivm8s1OrdaE

[Gustan Cho]

Before You Make an Offer on a Rental Property, Estimating the Debt Service Coverage Ratio (DSCR) is a Crucial First Move That Sets the Stage for Smart Investing.

Start by dividing your expected monthly rental income by your estimated monthly mortgage payment, which includes loan principal, interest, property taxes, homeowners insurance, and any association fees. In most residential DSCR loan programs, a DSCR of 1.00 means your rental income just covers your housing costs, while a DSCR of 1.25 means your rental income is 25% higher than your monthly payment.

You don’t need to own the property or have an appraisal to make your first DSCR estimate. All you need is a good guess of market rent, purchase price, down payment, loan terms, property taxes, insurance, and association fees.

Remember, your first DSCR calculation is just a starting point and does not guarantee loan approval. Each DSCR investor may have their own requirements for rental income, credit scores, down payments, property types, and cash reserves.

Definition of DSCR in Real Estate Investing

The Debt Service Coverage Ratio (DSCR) measures the extent to which a property’s income can service its debt obligations.

Real estate investors use the Debt Service Coverage Ratio (DSCR) to determine whether a property will generate sufficient income to service its debt independently of the borrower’s personal employment income.

Many residential DSCR mortgage programs are designed for investors purchasing or refinancing one- to four-unit investment properties.

Unlike regular investment property loans that consider the borrower’s personal income and debts, DSCR loans focus on the property’s rental income relative to the monthly housing payment. This method is often used by owners with several investment properties.

The Basic Calculation is:

DSCR = Gross Monthly Qualifying Rental Income ÷ Monthly PITIA

• PITIA means principal, interest, property taxes, homeowners insurance, and any association fees.
• Imagine you have your eye on a rental property listed at $300,000.
• You plan to put down 25%, which leaves you with a $225,000 mortgage.
• After tallying up your loan payment, taxes, insurance, and HOA dues, your monthly PITIA comes to $1,850.
• Similar units nearby rent for about $2,200 per month.

This Means Your Estimated DSCR Would Look Like This:

• $2,200 ÷ $1,850 = 1.19 DSCR
• In other words, your estimated qualifying rental income is roughly 19% higher than your monthly housing payment.
• That level might be acceptable to some DSCR mortgage investors, depending on their specific rules.
• Commercial real estate lenders often use a different DSCR formula, dividing total income by yearly debt payments.
• But for residential investment properties, the gross rent-to-PITIA method is the usual approach.

What DSCR Do Mortgage Investors Generally Require?

• A lot of residential DSCR investors will look for a DSCR of 1.00 or above, though the minimums will vary from one lender to another.
• A DSCR of 1.25 is generally regarded as quite good as the qualifying rent is well in excess of the housing payment.
• A DSCR of 1.00 means that the qualifying rent is equal to the monthly PITI.
• A DSCR of 0.90 means the qualifying rent will only cover 90% of the estimated housing payment.
• Some wholesale DSCR investors offer programs for properties with DSCRs below 1.00.
• There are even programs that don’t require a minimum DSCR at all.
• These programs might require better credit, larger down payments, additional cash savings, or higher interest rates.
• The key point is that a property with a DSCR under 1.00 is not in itself ineligible for financing.

How Do You Figure Out Market Rent Before Making an Offer?

An important part of your DSCR calculation is determining what the property could realistically rent for by comparing it to similar nearby rentals.

Focus on properties with similar size, number of bedrooms and bathrooms, condition, parking, and other features important to renters.

Websites like Zillow and Apartments.com are good places to start your research. Just remember that listed rents might not be what tenants actually pay or what an appraiser considers market rent.

Advertised as rent-ready at $2,500 per month.

Your research shows that comparable properties are renting for $2,100 to $2,250.

If you use $2,500 in your calculations, the investment might seem better than it really is. It’s safer to use $2,100 or $2,200 until you have stronger evidence.

Does the Appraiser Determine the Rental Income for a DSCR ;oan?

Many DSCR investors will require an appraisal with a market rent analysis (using Form 1007 for qualifying single family properties and Form 1025 for 2-4 unit properties).

If it’s currently let then the investor could look at the existing lease, the appraiser supported market rent or a program specific calculation.

Some program will take the lower of the lease rent or the appraiser supported market rent. Others have different rules for vacant, occupied and recently leased properties.

Therefore, a property you estimate at a 1.20 DSCR might receive a lower qualifying DSCR during underwriting if the accepted rental income comes in below your estimate.

Why Property Taxes and Insurance Can Change Your DSCR

A common mistake is using the seller’s current mortgage payment or property taxes in your DSCR calculation. If the seller bought the property years ago at a lower price, their taxes might be much lower than what you will pay after buying.

Some areas reassess property taxes after a sale, while others have different schedules. Check the local property tax system and estimate your taxes based on the expected purchase price and local rules.

Insurance is just as important. Rental properties usually need investment property insurance, and those costs can be very different from what you’d pay for a home you live in. If the property is in a flood zone or disaster-prone area, insurance costs can significantly reduce your DSCR.

Do You Need for a DSCR Loan?

Many residential DSCR programs offer financing with a down payment around 20% to 25%, though some may require more. Your down payment directly affects both your mortgage payment and your DSCR.

For example, increasing your down payment from 20% to 30% lowers your loan amount and usually reduces your monthly principal and interest payment.

This can improve your DSCR without needing more rental income. However, putting down more money means locking up more of your investment funds in the property. Consider whether the increase in DSCR is worth tying up extra cash that could be used for savings, repairs, or your next investment.

Why You Should Calculate Cash Flow Separately From DSCR

A property might meet all the DSCR requirements for a lender but still give you weak cash flow. Suppose your rental property generates $2,500 per month, and your PITIA is $2,000. Your DSCR would look solid. At first glance, it seems like you are pocketing $500 each month above your mortgage-related housing costs.

But you also need to include vacancies, repairs, maintenance, property management, leasing costs, and major replacements in the future.

If these extra costs average $450 per month, you have only $50 left in cash flow before taxes and other unexpected expenses. That doesn’t automatically make this a good investment. Run the numbers for both your mortgage-qualifying DSCR and your real-world cash flow before you commit to buying.

What If the Property Does Not Meet the Minimum DSCR?

A low DSCR is not always a dealbreaker. You might improve your ratio by negotiating a better price, putting more money down, or getting better mortgage terms. Some DSCR investors offer interest-only mortgages, which can lower your first monthly payment if allowed. Just remember, payments can increase after the interest-only period ends.

Other mortgage investors offer programs with DSCRs below 1.00 or with no DSCR requirement. Before putting down more money or accepting a higher interest rate, compare your financing options and make sure the property’s expected return still looks good.

Frequently Asked Questions About Estimating DSCR Before Making an Offer

Can I Calculate DSCR Without an Appraisal?

Yes. You can prepare a preliminary estimate using comparable rental properties and projected housing expenses. However, the final qualifying DSCR generally depends on the rental income and payment calculation accepted by the mortgage investor.

Can I Get a DSCR Loan on a Vacant Property?

Yes. Many DSCR programs permit financing of vacant investment properties using an appraiser-supported market rent estimate. The property’s occupancy and lease requirements depend on the investor’s guidelines.

Does a DSCR Loan Require Personal Income Verification?

Many residential DSCR programs do not require traditional W-2 income, personal tax returns, or employment-income calculations to establish repayment ability. However, borrowers may still need to document assets, reserves, credit, and other eligibility requirements.

Can I Use Airbnb Income to Calculate DSCR?

Some mortgage investors offer short-term rental DSCR programs that consider documented rental history, approved revenue projections, or other permitted income calculations. Other programs require traditional long-term market rent. The treatment of Airbnb income varies by investor and property type.

Can I Purchase a Rental Property Through an LLC?

Yes. Many DSCR mortgage programs permit title to be held in an eligible LLC. However, individual members or guarantors may still be required to provide personal guarantees and satisfy credit and other underwriting requirements.

What Is a Good DSCR for a Rental Property?

A DSCR of 1.20 to 1.25 or higher generally provides stronger coverage of the qualifying mortgage payment than a ratio of 1.00. However, an acceptable DSCR depends on the specific mortgage program and the investment’s operating expenses.

Final Thoughts on Estimating DSCR Before Making an Offer:

Running the DSCR numbers before you make an offer is a smart move for any rental property investor. By digging into realistic market rents and estimating your total monthly housing payment, you can quickly see if the property is likely to qualify for DSCR financing. Just remember, the final DSCR for your loan will depend on the rental income, appraisal, loan terms, and the investor’s underwriting rules.

Before you make an offer, stick with conservative rental income estimates, realistic property taxes, insurance costs, and financing terms in your calculations.

Always figure out your expected cash flow separately, factoring in maintenance, vacancies, and big repairs. If your DSCR estimate is close to the investor’s minimum, reach out to a DSCR mortgage pro for a preliminary loan scenario before you commit. This way, you can spot any financing hiccups early and still have room to negotiate the price or terms.

• This reply was modified 2 weeks, 1 day ago by  Gustan Cho.

[Gustan Cho]

Highly recommend Ryon Long of Village Capital. Ryon’s company, Village Capital, honored its no-lender-overlay policy on FHA loans. The borrower had a mid-score of 549 FICO, with recent late payments. However, the borrower had a 20% down payment and was approve/eligible per AUS findings. As with other mortgage lenders during tough economic times, high inflation, high mortgage delinquencies, and inflation with affordability issues on new homes, Village Capital did have a rougher-than-normal closing process, which I do not blame them for. Anyways, Ryon is a great wholesale account representative and goes above and beyond. Better than most other wholesale mortgage lender account executives. Five-star plus. Ryon is correct. Village Capital does tough deals.

https://vilcap.com/about-us/our-team

vilcap.com

Our Team • Village Capital

Meet the people who make Village Capital what it is.

[Gustan Cho]

Mortgage rates have shot up in recent weeks, and people with lower scores are being hit with significantly higher rates. It’s wrong to say there are no PAR rates or that anyone with a score below 700 will always get rates in the 7% range with points. Your rate will be determined by the type of loan, your LTV, whether you live in the property, the loan amount and how each lender is pricing their loans.

What is driving rates

The main reason mortgage rates are rising is the bond market, especially the 10-year Treasury, which mortgage rates usually follow. The 10-year yield has increased because of ongoing inflation, higher oil prices, global uncertainty, and worries about the federal deficit and debt. Fannie Mae expects the 10-year yield to stay at 5.3% through 2027.

The Fed raised rates in Sep to 3.75%- 4.00% (its first hike in over 3 years). Given higher inflation, expectations for another hike are very strong. That hike doesn’t directly determine the 30-year mortgage rate, but it will have an effect in terms of the short end of the curve, inflation expectations, and the risk premium that investors are demanding. The spread between mortgage rates and Treasury yields has also widened. Investors are demanding a higher return on their mortgage-backed securities, so even if the Treasuries don’t move, the mortgage rates can still go up. Recent reports from HousingWire cited a mortgage-to-Treasury spread of about 2.12%.

Where rates are now

Right now, the majority of 30-year fixed conventional mortgage rates are in the mid-7% range. Freddie Mac’s weekly survey showed 7.40% for the week of Oct 8 (up from 7.28% the previous week). MBA’s data showed 7.50% for the week ending Oct 9, which is the highest since November 2023.

Rates have gone up by nearly a full percentage point since June, and around half of this year’s increase occurred in the six weeks following late August. Currently, FHA and VA loans are generally priced lower than conventional 30-year loans, while jumbo loans are priced higher. Is the ‘no PAR rate’ claim genuine?

Partly true, partly not. A genuine PAR rate (zero points, zero lender credit) is still achievable on some loans, just not the norm in the current market. It’s not really available or attractive to many borrowers as the base pricing, LLPAs, and lender margins have all become less favorable on the higher-risk loans.

For conventional loans, the Fannie Mae LLPA matrix is going to make big adjustments based on your credit score and your loan-to-value. A score in the 680-699 range with an LTV of 90.01%-95% will get you a 1.125% LLPA, a score in the 640-659 range at the same LTV will get you a 2.500% LLPA. Those changes can quite rapidly turn a no-cost quote into a quote where you have to pay points to get a rate that’s competitive. The real story for people with scores below 700 is that you can absolutely still get a mortgage and in some cases the FHA or VA rates will actually be lower than the conventional rates. It’s just that you’re much less likely to find a true zero point conventional rate, particularly at higher LTVs. You can use discount points to bring your rate down, but they aren’t always necessary. The notion that if you have a score below 700 you’re going to be looking at rates in the 7% range plus points is pretty much true at the moment, though not always. One October pricing table, for instance, showed average 30-year conventional rates of 7.87% at a 680 score, 7.96% at a 660 score, 8.05% at a 640 score, and 7.78% at a 700 score. The best rates in that table were all starting at 760 or above. Mark.

FHA loans can be a major differentiator. The latest market quotes were FHA 30yr at 6.866%, VA at 6.951%, and conventional 30yr fixed at 7.388%. Of course, the FHA has mortgage insurance, and the VA has a funding fee (unless you’re exempt).

If you were talking to a client, you might say, “you can get a loan with a score below 700, it just will affect the numbers. On a conventional loan, you’ll be looking at a lot bigger LLPA adjustments and may well be asked to pay points. FHA and VA loans could potentially offer you a lower rate, but you need to look at the full monthly payment including mortgage insurance or the funding fee.”

Where rates are headed

In the very near term, it doesn’t look great for borrowers who are hoping for lower rates any time soon. Fannie Mae’s October forecast now has the average 30-year fixed rate at 7.4% for Q4 2026 and 7.5% in 2027. That’s a significant move up from their earlier forecast of 6.8% for Q4 2026 and 6.7% for 2027.

This is all based on the assumption that inflation stays high, energy prices stay high, the federal government continues to run huge deficits, and the 10yr yield stays at around 5.3%. If inflation comes down or the 10yr yield comes down, then rates could fall more rapidly than we’re currently expecting. As it stands, though, the majority of people think rates will remain above 7% into 2027. 2008-style crash?

A repeat of 2008 doesn’t seem likely. The 2008 crisis was the result of bad underwriting, minimal documentation, a huge number of subprime loans, excessive leverage, and a huge number of homes for sale. The lending rules are far more stringent now, with income and assets properly checked. Homeowners have significantly more equity, and there are far fewer homes for sale.

Still, to say there won’t be a repeat of 2008 is not to say there isn’t risk. Affordability is under pressure and purchase activity has been very weak for six weeks running. A recession, a major credit event or further rises in Treasury yields could all put pressure on prices in some markets. The systems that turned a housing downturn into a global financial crisis are very different today, though.

In short, rates are high due to inflation, oil prices, the federal deficit, Fed policy, and wider mortgage spreads all of which are pushing yields up. Those with scores below 700 are paying more, but in many cases the best option is to look at an FHA or VA loan, manage your LTV, or consider a temporary buy down rather than just go with the high rates and points.

https://www.youtube.com/watch?v=Ut28GIrC2lM

[Gustan Cho]

Can You Get Approved for a VA Loan After Chapter 13 Bankruptcy with Late Payments?

Yes, you can get a VA loan through manual underwriting after a Chapter 13 bankruptcy discharge, even with some late payments. Approval is not certain, but the VA underwriter will assess if your credit has improved and if you have enough income to manage the new mortgage.

The VA Lender’s Handbook states that a solid Chapter 13 repayment plan demonstrates acceptable credit. VA guidelines also instruct underwriters to consider your entire payment history, not just one late payment.

Reviewing Your Specific VA Loan Scenario

Your Situation Requires Careful Review Through Manual Underwriting.

• 683 FICO: The VA does not set a minimum credit score requirement.
• Chapter 13 discharged in March 2025: The VA does not require the same two-year waiting period after discharge that is needed for Chapter 7.
• Late payments in May and July 2025 will be considered, but they do not automatically disqualify you under VA rules.
• If you have 15 months of clean credit, it shows you have re-established good payment habits.
• Showing 12 months of on-time rent payments will help your application.
• Verified liquid reserves, like extra savings, demonstrate financial strength.
• This is especially important if you are considered for a credit exception or manual approval, regardless of whether the late payments in May and July 2025 were on a mortgage, an installment loan, or a credit card.
• The VA reviews your housing payment history and usually requires proof of payments for the last 24 months.

What Does the VA Say About Re-Establishing Credit

VA guidelines usually consider your credit satisfactory if you have at least 12 months of on-time payments after fixing earlier credit problems. Your bankruptcy case will also be reviewed. Having no late payments reported is a strong sign and forms the basis of your assessment. The underwriter will also examine how serious your past late payments were, why they happened, and your full credit history. The rate you get depends on the wholesale investor, loan amount, credit score, discount points, lock period, lender compensation, and underwriting requirements.

The mortgage broker can compare different wholesale lenders that accept manually underwritten VA loans. Getting approved and getting the best rate are not always the same. One lender might approve your credit profile, while another might not.

Before switching lenders, get an initial underwriting review and compare written Loan Estimates for the same terms. As your closing deadline approaches, focus on keeping your purchase contract secure.

How Gustan Cho Associates Can Help

Gustan Cho Associates handles VA loan cases that involve Chapter 13, manual underwriting, and tough credit situations. Based on what you have shared, I would not automatically reject your application. I would review your credit report, bankruptcy discharge, reasons for late payments, proof of housing payments, savings, and residual income.

The goal is to find a wholesale investor who considers your full situation and can offer better financing without risking your ability to close on the house.

In short, you have a 683 credit score, a Chapter 13, 15 months of on-time payments, and verified housing payments and savings. You are a strong candidate for VA manual underwriting. While this does not guarantee approval, late payments after bankruptcy do not automatically disqualify you.

26-7, Chapter 4 — Credit Underwriting

Gustan Cho Associates NMLS 873293 http://www.gustancho.com

• This reply was modified 3 weeks ago by  admin.

[Gustan Cho]

If your credit score is 680 instead of 740, you might pay a higher mortgage rate, especially with a regular loan. How much you save depends on your loan amount, down payment, loan-to-value ratio, mortgage type, and the rate you lock in.

For example, saving $165 each month adds up to about $60,000 over 30 years ($165 x 360 = $59,400). This estimate assumes your payment stays the same and does not include refinancing or paying off the loan early.

Having a 740 credit score does not always guarantee the best regular mortgage rates. Fannie Mae and Freddie Mac sometimes change rates for different score ranges, even for scores above 740.

At Gustan Cho Associates, we often help people with lower credit scores qualify for FHA, VA, and other mortgage programs. A score of 680 does not always mean you have to wait until you reach 740 to buy a home.

What do you think? Should buyers spend a few months improving their credit, or is it better to buy a home they can afford now and think about refinancing later?

The best choice usually depends on the actual financing costs, the current housing market, and how much someone can realistically improve their credit score.

[Gustan Cho]

Special Community Announcement | October 16, 2026The New GCA Mortgage Forums: Building America’s National Mortgage, Real Estate, and Housing Community

GCA Mortgage Forums is entering a new phase with a broader vision to become a national online hub where homebuyers, homeowners, real estate professionals, mortgage experts, investors, and businesses connect, share knowledge, find answers, and build lasting relationships.

GCA Mortgage Forums, also known as Great Content Authority Forums, is undergoing significant changes. Our goal is to create an organized, user-friendly community focused on mortgages and real estate. Members will find active discussions, practical solutions, national housing news, professional directories, educational resources, and financial tools.

This change builds on the mission shared on our About Us page and the October 6 restructuring announcement. Some features are already on the website; others are being updated or expanded.

Our Mission: Education, Connection, Collaboration, and Opportunity

The Mission of GCA Mortgage Forums is Simple but Ambitious:

We aim to create one of America’s most helpful and trusted online communities for mortgages, real estate, and housing. Consumers can get real answers, professionals can share knowledge, and everyone can find the information and connections needed to make better choices.

GCA Mortgage Forums Aims to Connect Consumers with Professionals Who Can Assist Them:

• A homebuyer denied a mortgage deserves a chance to understand why.
• A veteran seeking VA financing should have access to reliable information about eligibility and underwriting.
• A homeowner considering refinancing should explore options and understand the costs involved.

Likewise, mortgage loan officers need places to discuss difficult underwriting scenarios, real estate agents need financing resources, and business owners need opportunities to connect with customers and industry professionals.

Instead of being just another website with generic mortgage articles, GCA Mortgage Forums is becoming an interactive community where real questions spark practical discussions, helpful answers, and shared knowledge.

Ten Main Categories: The Proposed Structure of the New GCA Mortgage Forums

The following ten categories outline our plan to expand and organize the community. This is our proposed structure, though not every section is fully launched yet.

Mortgage Case Scenario Help Desk

• The mortgage case scenario help desk is the heart of our interactive community.
• Borrowers, loan officers, processors, and real estate professionals discuss tough mortgage situations, including low credit scores, bankruptcies, late payments, high debt-to-income ratios, manual underwriting, unusual income, and past mortgage denials.
• The goal is to find possible solutions, not guarantee approval.

Re-Establishing Credit and Credit Boost Boot Camp

Mortgage and Real Estate Daily News & Weekend Edition

• GCA Mortgage Forums Daily News and the Weekend Edition is a national news source covering mortgage rates, housing affordability, Federal Reserve policy, inflation, housing inventory, home prices, real estate trends, and lending rules.
• GCA Mortgage Forums Daily News will report on current events, while the Weekend Edition will add more context and a look ahead to the coming week.

Homebuying, Homeownership, and Real Estate Discussions

• This section is for first-time homebuyers, sellers, homeowners, renters, and anyone moving to a new state.
• Topics include buying versus renting, down payments, appraisals, inspections, property taxes, homeowners insurance, HOA issues, renovations, and local housing trends.

Mortgage Loan Programs, Credit, and Underwriting Education

• This is an educational hub for FHA, VA, USDA, conventional, jumbo, non-QM, DSCR, and other loan programs.
• Members can learn about rebuilding credit, bankruptcy and foreclosure rules, income calculations, underwriting requirements, and program eligibility.

Wholesale Lender Directory and Mortgage Professional Network

• This section is a resource for mortgage brokers and licensed originators seeking information on wholesale lenders, account executives, loan products, investor guidelines, special programs, and new lending relationships.
• It supports helpful industry discussions and helps professionals find financing options for complex cases.

Preferred Referral Partner and Business Directory

• This is a nationwide directory to help users find real estate agents, attorneys, insurance agents, home inspectors, title companies, appraisers, contractors, property managers, movers, and other service providers.
• Clear listings, credentials, coverage areas, and open referral relationships help consumers make smart choices.

Mortgage and Real Estate Resource Center

• This is a central library with mortgage calculators, FHA and conforming loan limits, property value tools like What’s My House Worth, key government and industry links, homebuying checklists, mortgage terms, and other practical resources.
• These tools help users get ready before making financial decisions.

Classified Ads, Career Opportunities, and Marketplace

• This is a moderated marketplace for mortgage and real estate jobs, business services, community classifieds, educational opportunities, and relevant ads.
• Mortgage companies can recruit, professionals can look for jobs, and businesses can share their services without crowding the main forums.

Real Estate Investing, Commercial Financing, and Business Lending

• This community is for investors, commercial mortgage professionals, developers, and business owners to talk about DSCR financing, rental property investments, multifamily properties, commercial real estate loans, construction, cash flow, investment analysis, and business financing.

Community Lounge, Introductions, and Off-Topic Discussions

• This is a friendly space for members to introduce themselves, celebrate milestones, share experiences, discuss community events, and connect beyond mortgage-related topics.
• The Off-Topic section helps members build real relationships while keeping the main forums focused and easy to use.

The Mortgage Case Scenario Help Desk: A Place Where Difficult Loans Get a Second Look

One of the main goals of the new GCA Mortgage Forums is to help borrowers who were told they don’t qualify for a mortgage. Some may have a 550 credit score, a recent bankruptcy discharge, substantial student loan debt, or inconsistent employment history. Others may be veterans with high residual income but a history of credit issues. Self-employed business owners may have significant cash flow but limited taxable income.

Not every case leads to mortgage approval. Still, if one lender says no, it does not mean every program or lender will make the same decision.

The Mortgage Case Scenario Help Desk encourages careful review of program guidelines, underwriting rules, lender requirements, compensating factors, and required documents.

The goal is not just to say yes or no. We want to explain why, point out the right guidelines, and help people understand their options.

Members should never publish Social Security numbers, full credit reports, account numbers, or other private borrower information. Educational forum guidance does not replace a formal mortgage application or lender underwriting decision.

GCA Mortgage Forums Daily News: Building a National Mortgage and Housing News Destination

Another major part of the transformation is expanding GCA Mortgage Forums Daily News and the GCA Mortgage Forums News Weekend Edition. We want to build a well-known national news source that covers how mortgage lending, the housing industry, the economy, and consumers are connected.

Instead of just repeating market headlines, our news aims to answer three key questions: What happened? Why did it happen? How does it affect consumers and industry professionals?

A report on rising mortgage rates, for example, should explain the effects on purchasing power, monthly mortgage payments, refinancing opportunities, housing demand, and affordability. The news section can grow community participation by linking news stories to related discussion forums. Readers with questions about an article can join conversations with other consumers and professionals. Our credibility depends on accurate reporting, clear source dates, clear distinctions between confirmed policy changes and speculation, and making corrections when needed.

Connecting People Across All 50 States and Beyond

GCA Mortgage Forums is built to be a national community, not just a discussion board for one area. A homebuyer in Texas, a veteran in Florida, a real estate investor in California, a Realtor in Illinois, and a mortgage loan officer in Wisconsin may face different market conditions and regulatory requirements, but they can benefit from exchanging information.

State-specific discussions, local professional directories, housing market updates, and location-based resources connect people across the country. A national community brings together experienced professionals and newcomers.

Mortgage veterans share their knowledge, while newer professionals ask questions, develop skills, and contribute new ideas. The platform highlights professional credentials where relevant and reminds users that mortgage programs and licensing requirements vary by jurisdiction. GCA Mortgage Forums and Sub-Forums share a commitment to mortgage education, but each platform has a distinct role.

Gustan Cho Associates, a DBA of Coast 2 Coast Mortgage Lending, NMLS 376205, concentrates on mortgage program information, borrower qualification, underwriting guidelines, and personalized mortgage assistance.

Viewers, Members, and Groups of GCA Mortgage Forums

GCA Mortgage Forums is the larger, interactive community where consumers and professionals can ask questions, share real experiences, discuss financial and housing news, explore tools, and find industry resources. The community welcomes different opinions and participation from qualified professionals in the mortgage and real estate fields. Users can join educational discussions without applying for a loan or becoming a customer. This distinction is important for developing long-term community credibility and trust.

What Will Make the New GCA Mortgage Forums Different?

The long-term success of GCA Mortgage Forums is about more than how many users sign up or topics are posted. What matters most is whether visitors find helpful answers and want to return.

Several key principles will guide the restructuring of the forums: encourage real questions, provide accurate answers, and offer useful resources rather than repetitive content.

Real Professional Participation:

• Encourage experienced mortgage and real estate professionals to contribute their knowledge.
• Make the site easier to use by organizing it into clear main categories and helpful sub-forums.

Transparency and Accountability:

• Establish moderation standards, professional disclosure requirements, and rules for advertising and directory listings.
• Encourage community participation by giving members reasons to ask questions, share their experiences, join discussions, and help each other.
• Build independence and trust by clearly stating when content is educational, opinion-based, promotional, or sponsored.
• Being listed in a professional directory does not mean we guarantee an endorsement.

For directories involving mortgage professionals, real estate agents, and settlement service providers, compensation and referral arrangements must also comply with applicable laws, including RESPA where relevant.

Our Long-Term Vision: More Than a Forum

GCA Mortgage Forums has the chance to become a wide network of mortgage and real estate knowledge. Users can read the latest mortgage news in the morning, research loan qualification guidelines, ask complex mortgage questions, use a mortgage calculator, locate experienced professionals, and participate in informative discussions—all from one website.

For mortgage loan originators, this community could be a great place for training discussions, wholesale lending info, networking, and researching case scenarios.

For homebuyers and homeowners, it could be the go-to place for clear, accurate, and practical explanations about their financial situations.

For businesses and service providers, it could offer opportunities to educate consumers, demonstrate expertise, and build professional relationships. Achieving this vision requires consistent moderation, reliable information, responsive site performance, and a growing community of knowledgeable contributors.

Join the Next Chapter of GCA Mortgage Forums

The changes at GCA Mortgage Forums are about building something valuable that can continue to grow for years. Whether you’re buying your first home, dealing with a mortgage denial, exploring investment properties, following housing news, or seeking professional connections, this platform aims to be a welcoming place to begin.

The new setup is designed to make information easier to find, conversations easier to follow, and resources more accessible. The community’s greatest asset is the people who participate, share experiences, and contribute valuable knowledge.

Final Thoughts

The new GCA Mortgage Forums is an ambitious project to bring mortgage lending, real estate, housing news, consumer education, professional resources, and community discussions together on one organized national platform. The goal is to improve the quality of information and conversations, not just add more pages. Success will depend on how well the platform helps people solve problems, learn from each other, and find trustworthy resources.

As new categories, directories, news, and tools are added, members can help by asking good questions, providing thoughtful answers, and sharing constructive feedback.

Every useful discussion may assist someone facing a similar challenge. This is the heart of the Great Content Authority Forums vision: a national mortgage and housing community built on knowledge, participation, opportunity, and trust.

Ask a question. Share what you know. Explore the latest mortgage and housing news. Connect with a growing national community.

Explore GCA Mortgage Forums. Browse Discussions

Editorial Note: The ten categories above are a proposed organizational vision informed by the existing forum and restructuring announcement. They should not be interpreted as confirmation that every directory, resource, or feature is fully operational today.