The Caton Team is proud to announce, that Berkshire Hathaway HomeServices offers a simple loan to help seller prepare their home for sale.
Check out the loan calculator to see the interest rate, origination fees and cost of your plans >>> HERE.
Fund are available quickly. Flexible vendor options, flexible on what a seller spends their funds on, no vendor platform markups. We’d love to sit down with you and discuss how Get Ready Capital can help you sell your home! CONTACT THE CATON TEAM FOR FURTHER DETAILS | Call | Text 650.799.4333 | Email | Info@TheCatonTeam.com
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We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out at your convenience for a personal consultation. Please enjoy our free resources below and get to know our team through our clients’ words>>>Testimonials.
Got Real Estate Questions? The Caton Team is here to help.
We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
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Make sure you know how to protect their data through programming options on their voice assistants.
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Voice assistants are a common feature in modern homes, offering convenience and control over various smart devices. However, the growing adoption of this technology also raises concerns over privacy and data security. Many smart home devices, particularly those from major tech companies like Amazon and Google, collect and monetize consumer data without fully disclosing to the end user how that data is utilized.
For real estate agents working with customers who are interested in smart home technology like voice assistants, knowing that this happens—and how to mitigate any unwanted collection of private information—is valuable information to relay. Here are some critical strategies and best practices to share with your smart home clients for safeguarding their data when using voice assistants.
The Privacy Concerns with Major Voice Assistants
Voice assistants from Amazon (Alexa) and Google (Google Home) are some of the most popular on the market, but they come with extensive data collection practices. A recent study by VPN provider Surfshark found that Amazon’s Alexa collects around 28 data points and Google Home collects 22. This includes sensitive data like device identifiers, location, contacts, browsing history and even audio recordings. The data collected is often linked to user profiles, potentially revealing personal addresses, precise location and even health data. These findings highlight the importance of proactively managing privacy settings on voice assistants.
Strategies for Securing Privacy
There are ways to continue using voice assistants and mitigate the amount of information they collect.
Know what’s being collected. Make sure to review the privacy policies of any voice assistant and its connected devices. Many of these platforms offer transparency reports or privacy dashboards that show exactly what data is being collected and stored.
Mute the device when it’s not in use. Most voice assistants come with a mute function, which can be activated when the device is not in use to ensure it isn’t listening when it shouldn’t be. Some voice assistants, like Josh.ai, offer a physical mute button or a built-in privacy switch, giving users confidence that their conversations remain private.
Set up voice recognition and “wake words” with intention. Ensure that the voice assistant is set up to only activate with specific wake words—a word or phrase that you set up to trigger the assistant into an active mode—and isn’t mistakenly listening to everyday conversations. This prevents accidental activation and reduces the chances of unintended recording.
Adjust the device’s privacy settings. In the app settings of most voice assistants, users can review and delete their voice history or choose settings that limit data sharing. For example, users may opt out of certain voice recordings being stored or shared with third-party apps.
Limit user access. Controlling access is key to privacy. Set up specific roles or password-protected user accounts for each family member who uses the voice assistant. This not only secures access but also prevents unauthorized users from controlling the smart home.
A Privacy-Focused Approach: Josh.ai
One example of a voice assistant prioritizing privacy is Josh.ai, a professionally installed solution that offers advanced privacy controls. Here are a few of the features the technology offers:
Transparent Voice Activation: Josh.ai only activates when its designated wake word is used, and its microphones show a clear visual indicator when listening. This minimizes accidental recordings.
Local Processing of Data: Whenever possible, Josh.ai processes data locally within the home, reducing the amount of information sent to the cloud. When cloud processing is necessary, the company uses encrypted connections to secure user data.
User Ownership of Data: Users maintain control over their data. Settings can be adjusted based on comfort levels with data sharing, ensuring a balance between personalized functionality and privacy.
Secure Access Management: Strict password policies and user roles are enforced, requiring authentication for access to the smart home system. This ensures that only authorized individuals can control or access information through the voice assistant.
By understanding privacy settings and taking control of how data is managed, you and your clients can confidently enjoy the benefits of voice assistants without compromising on security. Remember, to convey that privacy is in the hands of the individual—don’t hesitate to use the tools available to protect it.
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We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out for a personal consultation. Please enjoy our free resources below and get to know our team from our TESTIMONIALS.
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Got Real Estate Questions? The Caton Team is here to help.
We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral, or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – wouldn’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
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The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?
Over a 14-month period starting in September, lenders are phasing in new appraisal reporting for all GSE-conforming loans. As appraisers adjust to the new standards, agents will be key partners in ensuring the data is accurate and complete. Learn more— and watch the latest “Supporting Your Value” appraisal webinar.
For a long time, appraisals for mortgage transactions have been reported in the same way—via a form designed for a typewriter. The form varies depending on property type, but each variation includes boxes to check and blank spaces to fill out.
Although appraisers have long completed forms using web-based platforms, these forms—required for loans conforming to government sponsored enterprise standards—are rigid in structure. Often, there isn’t enough space for the appraiser to provide all relevant information. In that case, the reader sees the dreaded, “See addendum.” At that point, the reader of the report will have to read through sometimes pages of freeform text to find what they are looking for.
Beginning in September 2025, all of this will change. Read on to learn more about the transition, and how appraisers and agents can work together to get through the transition.
Why Appraisals Are Changing
The new appraisal reporting structure, known as the Uniform Appraisal Dataset (UAD 3.6), was spearheaded by Fannie Mae and Freddie Mac under the direction of the Federal Housing Finance Agency. The initiative has been underway since 2018.
UAD 3.6 aligns appraisal data with current mortgage industry data standards. In addition, the new appraisal report allows for dynamic reporting of appraisal data and makes the information easier for readers to consume while increasing discrete data points that the GSEs can use for internal analysis.
Under this new structure, appraisal reports, regardless of property type, will have a standard front page that includes:
Property summary with the opinion of market value
Photo of the subject property
Property description
Appraisal type
The report will also feature much more detail upfront on the interior of the property, allowing appraisers to add descriptive commentary to go along with photos. Condition and quality will be broken out by exterior and interior, with areas for description of interior details.
The dynamic form expands as needed to include additional information. For instance, if the appraiser indicates there’s an accessory dwelling unit, a section will appear for the appraiser to provide details. If there is no ADU, however, that section will not appear. (Here are some sample scenarios to show you what the new reports will look like. The Single Family Scenario 5 beginning on page 271 contains key characteristics that appear often in residential appraisals.)
Appraisers across the country are preparing for the change, but it won’t be easy. That’s why the GSEs have allowed a 14-month rollout period. During that time, all appraisal software used for mortgage transactions is changing to accommodate the new report. Appraisers must consider whether their existing provider or a competitor best meets their needs.
In addition, UAD 3.6 also has many new discrete datapoints that appraisers must relay—and this highlights the importance of the appraiser-agent relationship. Any relevant information agents can provide upfront will help appraisers complete the appraisal in a timely manner and prevent the need for a return trip the property or other delays.
Take a Deeper Dive into UAD 3.6
The UAD 3.6 will bring big change—from the datapoints appraisers are required to provide to the way appraisal results are reported. Appraisal forms for individual property types will be a thing of the past for most appraisals. Some lenders will begin using the new UAD as early as September 2025. Use of the form will be required for all Fannie Mae and Freddie Mac loans as of November 2026.
How can you get up to speed? As part of NAR’s “Supporting Your Value” webinar series, speakers from Fannie Mae and Freddie Mac recently gave NAR members a rundown of why the UAD is being updated, showed examples of data required and what the new reporting look will look like, and provided resources to help agents and appraisers prepare for the transition. Hundreds of NAR members registered and attended the no-cost session, and you can now watch a recording of the April 29 webinar, “The New Uniform Appraisal Dataset: What REALTORS® Need to Know.”
Cell| Sabrina 650.799.4333 |Susan 650.796.0654 | EMAIL | WEB| BLOG
We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out for a personal consultation. Please enjoy our free resources below and get to know our team from our TESTIMONIALS.
Effective. Efficient. Responsive. The Caton Team 🏡
Got Real Estate Questions? The Caton Team is here to help.
We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral, or some guidance – we are here for you. Contact us at your convenience – we are but a call, text, or click away!
The Caton Team believes, in order to be successful in the San Francisco | Peninsula | Bay Area | Silicon Valley Real Estate Market, we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined local Real Estate experience and knowledge – wouldn’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
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The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?
Since buyers form an opinion within seconds of seeing a home, curb appeal is crucial.
Recommended upgrades:
A fresh coat of exterior paint or updated siding
A new front door or garage door for a polished look
Well-maintained landscaping, including trimmed bushes and fresh mulch
Outdoor lighting to create a warm, inviting atmosphere
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4. Energy-Efficient Upgrades (ROI: 60-90%)
Today’s buyers prioritize energy efficiency to reduce long-term costs.
Upgrades that add value include:
Installing energy-efficient windows and doors
Adding insulation to improve heating and cooling efficiency
Replacing old HVAC systems with modern, cost-saving models
Installing smart thermostats and LED lighting for convenience and savings
5. Converting Unused Spaces (ROI: 65-75%)
Buyers love extra living space, and sellers can increase their home’s value by:
Finishing a basement or attic for additional square footage
Creating a home office, gym, or guest suite—features in high demand
Converting a garage into a functional space if parking isn’t a concern
Leveraging Home Improvements to Close More Deals
As an agent, positioning yourself as a knowledgeable advisor on home improvements can strengthen your client relationships and enhance your reputation. Here’s how:
Offer Pre-Listing Consultations – Walk through a client’s home and suggest cost-effective upgrades to boost value.
Connect Clients with Trusted Contractors – Recommend reliable professionals for renovations and repairs.
Use Before-and-After Success Stories – Showcase past listings that benefited from strategic upgrades to persuade hesitant sellers.
Highlight Upgrades in Marketing Materials – Emphasize desirable renovations in listing descriptions and social media promotions.
Home improvements don’t have to be expensive or time-consuming to make a significant impact. By guiding sellers toward smart, high-ROI upgrades, real estate agents can help them maximize their home’s value, attract more buyers, and close deals faster.
Cell| Sabrina 650.799.4333 |Susan 650.796.0654 | EMAIL | WEB| BLOG
We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out for a personal consultation. Please enjoy our free resources below and get to know our team from our TESTIMONIALS.
Effective. Efficient. Responsive. The Caton Team 🏡
Got Real Estate Questions? The Caton Team is here to help.
We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral, or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – wouldn’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
Cell | Sabrina 650.799.4333 | Susan 650.796.0654 | EMAIL | WEB| BLOG
The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?
A shout out to my friend and lender Christian Carr – NMLS #1466899 for posting this information I felt I should share here.
The Federal Housing Administration (FHA) updates its loan limits and the mechanics of its loan programs each year. For 2025, there are key changes that homebuyers—especially first-time and moderate-income borrowers—should be aware of.
FHA Loan Limits in 2025
• Single-family homes: Loan limits range from $524,225 in low-cost areas (floor limit) to $1,209,750 in high-cost counties (ceiling limit).
• Multi-unit properties:
◦ 2-unit: $671,200 – $1,548,975
◦ 3-unit: $811,275 – $1,872,225
◦ 4-unit: $1,008,300 – $2,326,875
• These limits are tied to median home prices and align with conforming loan ceilings set by the FHFA ($806,500 standard / $1,209,750 high-cost).
Why it matters: Higher limits allow FHA financing for more expensive homes without needing a jumbo mortgage.
FHA Repayment Terms & Refinancing Options
✅ Fixed Terms and Gradual Payment Options
• Standard FHA mortgages come with 15- and 30-year terms
• Graduated Payment Mortgages (GPMs) are also available, allowing payments to increase gradually (e.g., 2.5%–7.5% annually) during the first 5–10 years before leveling out en.wikipedia.org.
🔄FHA Refinance Programs (2025 Highlights)
FHA homeowners may refinance under four main options:
1 Simple Refinance – Switch from one FHA loan to another to lower rate or shorten term, requires appraisal.
2 Streamline Refinance – Less documentation, sometimes no appraisal or credit check, must show “net tangible benefit” and have made 6+ on-time payments.
3 Cash‑Out Refinance – Access up to 85% equity for any purpose; requires appraisal.
4 203(k) Rehab Refinance – Finance purchase or refinance plus home improvements; available for primary residences only.
What Buyers Should Know
• Loan limits expanded in 2025—check your county limits via the HUD lookup tool.
• Graduated Payment Mortgages can help match payments to growing incomes—especially useful for younger buyers.
• Streamline refinances are attractive for existing FHA homeowners: minimal paperwork, faster turnaround—but closing costs apply (~3–6%).
• Cash‑out and 203(k) options remain available, but careful consideration of equity use and repayment ability is essential.
Final Thoughts
If you’re shopping for a new home or refinancing in 2025, FHA’s expanded limits can open more opportunities. Whether you’re looking to lower your rate, tap into equity, or finance renovations, FHA offers versatile programs—but it’s important to choose based on your goals and ability to repay. To verify your specific county’s limit, visit the official HUD lookup tool . For details on repayment plan options, review FHA’s official policy handbook or speak to an FHA-approved lender.
Cell| Sabrina 650.799.4333 |Susan 650.796.0654 | EMAIL | WEB| BLOG
We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out for a personal consultation. Please enjoy our free resources below and get to know our team from our TESTIMONIALS.
Effective. Efficient. Responsive. The Caton Team 🏡
Got Real Estate Questions? The Caton Team is here to help.
We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral, or some guidance – we are here for you. Contact us at your convenience – we are but a call, text, or click away!
The Caton Team believes, in order to be successful in the San Francisco | Peninsula | Bay Area | Silicon Valley Real Estate Market, we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined local Real Estate experience and knowledge – wouldn’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
Cell | Sabrina 650.799.4333 | Susan 650.796.0654 | EMAIL | WEB| BLOG
The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?
Caring for our planet is important for The Caton Team. When we saw this service – we knew we had to share it with our people…
Many residents may not start to think about their options for disposing toxic waste—including paints, batteries and fertilizers—until the very last minute when they are moving. Sometimes they even ask their Realtor to take it in, which is actually illegal unless the realtor signs a special waiver.
To help Realtors avoid this issue, San Mateo County Health has provided an informational postcards that you can share with clients, which explains their toxic waste disposal options. Clients of SAMCAR Realtors who bring the postcard to their HHW drop-off event appointment will receive a Home Depot gift card that may help them with the moving process.
It is important we all do our part for our community and planet. THANK YOU!
Got Questions? The Caton Team is here to help.
Cell| Sabrina 650.799.4333 |Susan 650.796.0654 | EMAIL | WEB| BLOG
We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out for a personal consultation. Please enjoy our free resources below and get to know our team from our TESTIMONIALS.
Effective. Efficient. Responsive. The Caton Team 🏡
Got Real Estate Questions? The Caton Team is here to help.
We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral, or some guidance – we are here for you. Contact us at your convenience – we are but a call, text, or click away!
The Caton Team believes, in order to be successful in the San Francisco | Peninsula | Bay Area | Silicon Valley Real Estate Market, we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined local Real Estate experience and knowledge – wouldn’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
Cell | Sabrina 650.799.4333 | Susan 650.796.0654 | EMAIL | WEB| BLOG
The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?
The stats are in for June 2025. What I see is price sensitivity. There is a lot of inventory on the market compared to years past, there is change in the air and it reflects in sales. We see some homes fetch multiple offers and sell over list price, but not crazy over. We also see some homes sitting and taking price reductions to attract offers. This year just feels different from the past 21 summers I’ve been in Real Estate. But that is not necessarily a bad thing. When the market is different that often is a great time to buy. All depends on where, when and the budget. So…. If you’re considering a Real Estate move, contact The Caton Team for a free consultation. With over 40 years of combined Real Estate experience, we have the knowledge and know-how to guide you to your goal. Call us at 650.799.4333 or email us at info@TheCatonTeam.com.
Whether you are selling or buying – today or tomorrow – contact The Caton Team – we’re happy to help you achieve your Real Estate goals.
Effective. Efficient. Responsive. The Caton Team 🏡
Each market is unique and with over 40 years of combined Real Estate experience, The Caton Team is more than happy to be of service if and when you are considering a move. Contact us anytime during your journey, together we’ll help you achieve your Real Estate goals.
Got Questions? The Caton Team is here to help.
Call| Text | Sabrina 650.799.4333 |EMAIL | WEB| BLOG
We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out for a personal consultation. Please enjoy our free resources below and get to know our team TESTIMONIALS.
Got Real Estate Questions? The Caton Team is here to help.
We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral, or need some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – wouldn’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
Call| Text | Sabrina 650.799.4333 | Susan 650.796.0654 |EMAIL | WEB| BLOG
The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?
When our long time friends needed to sell the family home – it was a honor to get the call. This 100+ year old home was in the family for over 60 years, raising multiple generations. But it was time. Time to move on.
Each home and client is unique and so is the plan for sale. Together we came up what was best for the client on their time line. Then it was time for us to shine.
We held two weekends of open houses and set an offer date – yes – even in this odd market of Spring /Summer 2025. We were grateful to receive 3 very strong and compelling offers.
Thank you Eric Ma with Bay One Realty for a smooth transaction. We are grateful to work with professionals such as yourself.
We love what we do – How can The Caton Team help You?
We truly enjoy helping our clients sell their homes. The Caton Team loves what we do and would love to help you – please enjoy our resources below. Get to know us at through our clients words.
Got Real Estate Questions? The Caton Team is here to help.
We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654 | EMAIL | WEB| BLOG
The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?
Options range from family loans to outright gifts to help your children buy a home.
If you want to help your children buy a home there are a number of ways to go about it, ranging from family loans to outright gifts. Lofty home prices, rising mortgage rates and a tight inventory of homes for sale have shut many young buyers out of the housing market. In 2023, the median age of home buyers was 49, the highest on record, according to a survey from the National Association of Realtors — which means first-time buyers are delaying their purchases. The typical first-time buyer was 35, one year less than last year’s all-time high.
With that in mind, parents (and grandparents) of would-be home buyers are often interested in helping out. Their options include gifting a down payment, co-signing a mortgage, jointly owning a home, making a loan, and buying a home outright for your children or grandchildren. Each of these avenues of financial support has its own perks and pitfalls.
First, consider how any assistance could affect family relationships. Your children or their spouses may be anxious or uncomfortable about accepting financial help from parents or in-laws. Siblings feelings matter, too. “If you have multiple children, spend some time upfront to understand how giving or loaning to one child might affect family dynamics,” says Mitchell Kraus, a certified financial planner based in Santa Monica, Calif. “We’ve seen years of resentment coming from a small loan to one family member when it was not available to another.”
Intra-family loans
One option that could benefit both parties is an intra-family loan. You may be able to offer your child a lower interest rate than a conventional mortgage lender would while still earning a higher interest rate than you could earn from a savings account. For example, if you provide your child with a mortgage at a 4.5% interest rate, you’ll earn almost four percentage points more than the 0.55% average yield for a bank savings account. Your child, meanwhile, will pay significantly less than the national average for a 30-year fixed-rate mortgage.
An intra-family loan works especially well for well-off individuals who can afford to give their children the money but prefer the financial discipline that comes with a loan, says Tim Burke, chief executive officer of National Family Mortgage, a family lending agency. “For many parents, the motivation to lend money over gifting it is just about personal accountability,” he says. “Parents feel the responsibilities that come with homeownership, and the satisfaction that comes with meeting these responsibilities builds character.”
That was the case for Mary and Terry Shaffer of Pittsburgh, who lent money to both of their children to buy homes in that city. “Our son and our daughter do not like things handed to them, although they deserve to be helped,” says Mary, 68. “They have worked hard, and they both had accumulated savings for their closing costs.”
If parents need assurance that their child can afford the monthly payments, they should ask the child to get preapproved for a conventional mortgage, Burke says. However, that could be difficult for some children, especially if they’re self-employed borrowers. Even if a self-employed individual’s debt-to-income ratio — the amount of debt you owe as a percentage of your monthly income — may support a loan, a single year in which income declines may cause a bank to reject the application.
If your child can’t get preapproval, it comes down to your judgment. “If you think your family member is not going to repay you, then don’t go through the exercise of setting up a loan that isn’t going to work,” Burke says.
Put the terms of the intra-family loan in writing so they’re clear and it’s an arm’s-length transaction, says Brian Lamborne, senior director of advanced planning at Northwestern Mutual. Putting the terms of the loan in writing can also help you deal with instances in which your children are unable to make payments. For example, you can agree ahead of time that should your child suffer financial hardship, payments will be deferred for a certain period of time — perhaps six months or up to a year — and moved to the end of the loan.
The loan agreement should contemplate worst-case scenarios as well. For example, you may want to state the conditions under which the parents could foreclose on the property so they can sell it and pay off the loan.
It’s also important to understand the tax implications for intra-family loans. Borrowers who itemize can only deduct interest on a loan secured by a mortgage if the mortgage has been properly recorded. In order to do that, families need to obtain a deed of trust and file it with the borrower’s local government authority, such as the registrar of deeds or country clerk’s office. A real estate attorney can help you draw up these documents.
If the loan exceeds $10,000, the IRS requires you to charge an interest rate equal to or above the Applicable Federal Rate (AFR), which the IRS publishes monthly. The interest must be reported as income on your tax return.
If you don’t want to act as the loan servicer, you could use National Family Mortgage to set up, document and service the loan. It will email payment reminders and monthly statements, collect and credit payments, and issue year-end IRS 1098 and 1099-INT tax forms. Cost: a one-time fee of $725 to $2,100, depending on the size of the loan, and optional loan servicing starting at $15 per month.
Making a gift
For some families, the easiest solution is to give children enough money to make a down payment or buy a house outright. Gifting spares families the hassle of a loan and damage to their relationships if a loan can’t be repaid. Mortgage lenders generally allow a relative to supply the entire down payment, but they will require a letter that provides the name of the giver, the amount of the gift and a statement that the giver doesn’t expect to be repaid.
As is the case with a loan, it’s important to understand the tax implications of this transaction. In 2024, you can give up to $18,000 per person to as many people as you’d like without having to file a gift tax return. Married couples can give up to $36,000 per person.
Any amount over the annual limit will reduce your exemption from the federal estate and gift tax. This isn’t a problem for most families because the federal estate tax exclusion is $13.61 million for 2024 or $27.22 million for married couples. However, if Congress fails to extend the 2017 Tax Cuts and Jobs Act, the exclusion will drop to about $6 million in 2026.
In any event, parents or grandparents should only give a gift they can afford without jeopardizing their own financial security. “There are no loans when it comes to your own retirement,” says Jennifer Weber, a CFP in Lake Success, N.Y. “So only help in ways that you can afford now and in the future.”
Other options: co-signing and co-borrowing
If your child can’t qualify for a mortgage based on their own income and credit record but can afford monthly payments, co-signing a mortgage is one way to help them buy a home. However, it can be risky.
A co-signer acts as a guarantor for the primary borrower, promising to assume responsibility for repayment if the primary borrower doesn’t pay as required. The lender will review your sources of income and your credit to ensure your income is high enough and your credit strong enough to qualify for a mortgage.
If your child falls behind on monthly payments, your own credit could suffer. Plus, co-signing for a mortgage will increase your own debt-to-income ratio which could make it more difficult for you to borrow for your own purposes. Also, some lenders don’t allow co-signers.
In another arrangement, a co-borrower or joint applicant shares ownership of the loan and assumes responsibility for payments from the start. In general, you and your child combined must put down at least 20%, and your child must cover the first 5% of the down payment from their own funds. Otherwise, the property may qualify as an investment, in which case you’ll be charged a higher interest rate for the loan and be required to have more financial reserves. But If your child fails to pay the mortgage, property taxes or insurance on time, that could ding your credit history or result in a lien against the property.
Cell| Sabrina 650.799.4333 |Susan 650.796.0654 | EMAIL | WEB| BLOG
We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out for a personal consultation. Please enjoy our free resources below and get to know our team from our TESTIMONIALS.
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We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral, or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – wouldn’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
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The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?
Buying a home is one of the biggest financial decisions you’ll ever make. It’s exciting, but it can also feel overwhelming if you don’t have the right guidance. The key to navigating the homebuying process with confidence is understanding the steps involved and working with the right professionals. Here’s how you can make your journey smoother and more successful.
1. Get Pre-Approved for a Mortgage
One of the first steps to take when buying a home is getting pre-approved for a mortgage. This gives you a clear understanding of your budget and strengthens your position when making an offer. Lenders will review your credit, income, and financial history to determine how much you qualify for. Having a pre-approval letter in hand signals to sellers that you are a serious buyer.
2. Work with a Knowledgeable Real Estate Agent (like The Caton Team)
A real estate agent can be your best ally in the homebuying process. They have access to market insights, negotiation expertise, and a deep understanding of the home search and purchase process. Choose an agent with experience in your preferred area who can help you find the right home and guide you through each step of the transaction.
3. Understand the Market and Set Realistic Expectations
Before you start house hunting, take the time to research the local real estate market. Look at property prices, neighborhood trends, and inventory levels. This helps you set realistic expectations about what you can afford and what’s available within your budget. Your real estate agent can provide valuable insights to help you make informed decisions.
4. Make a Competitive Offer
Once you find the right home, it’s time to make an offer. Your agent will help you determine a fair price based on comparable properties and market conditions. In competitive markets, you may need to act quickly and include strong terms, such as a larger earnest money deposit or a flexible closing timeline, to make your offer stand out.
5. Conduct a Thorough Home Inspection
A home inspection is a crucial step that helps uncover potential issues with the property. Hiring a professional inspector ensures you know about any hidden problems before closing. If significant issues arise, you may have the option to negotiate repairs or reconsider your purchase.
6. Secure Financing and Prepare for Closing
Once your offer is accepted, work closely with your lender to finalize your mortgage. This involves submitting required documents, locking in your interest rate, and reviewing loan terms. Additionally, you’ll need to secure homeowners insurance and complete any final paperwork. Your real estate agent and lender will guide you through this process to ensure a smooth closing.
7. Close the Deal and Move In
The final step is closing day, where you’ll sign the necessary documents, make your down payment, and receive the keys to your new home. Before moving in, do a final walkthrough to confirm the property is in the agreed-upon condition. Then, celebrate—you’re officially a homeowner!
Final Thoughts
Buying a home doesn’t have to be stressful. With the right preparation, professional guidance, and a clear understanding of the process, you can confidently navigate your homebuying journey. If you’re looking for expert assistance, reach out to experienced mortgage professionals who can help you every step of the way.
Cell| Sabrina 650.799.4333 |Susan 650.796.0654 | EMAIL | WEB| BLOG
We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out for a personal consultation. Please enjoy our free resources below and get to know our team from our TESTIMONIALS.
Effective. Efficient. Responsive. The Caton Team 🏡
Got Real Estate Questions? The Caton Team is here to help.
We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral, or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.
A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – wouldn’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.
Cell | Sabrina 650.799.4333 | Susan 650.796.0654 | EMAIL | WEB| BLOG
The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?
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