Blog — First Rate Financial Group

06

Oct

Home Buyer Tips

Why Your Mortgage Approval Can Change When the Home Has an Accessory Dwelling Unit

An accessory dwelling unit can make a property especially appealing. A detached guest house, converted garage, basement apartment, or backyard unit might provide space for relatives, a home office, or potential rental income.

But when you are financing the purchase, that additional living space can introduce questions that would not necessarily exist with a more traditional single-family home.

The Property Has to Be Evaluated Too
Mortgage approval is not based solely on the borrower’s income, credit, assets, and debts. The property securing the mortgage also has to meet applicable requirements.

When an ADU is present, the lender and appraiser may need to understand exactly what it is and how it relates to the primary residence.

Is it a separate structure? Does it have its own kitchen? Was an existing part of the property converted? These details can help determine how the property is evaluated.

Permits and Property Records May Matter
One important question is whether the additional living space was legally created and how it is reflected in available property records.

Buyers should not assume that a finished structure is automatically recognized as permitted living space simply because it looks professionally completed.

If something about the ADU is unclear, additional documentation or investigation may be needed.

Rental Income Is a Separate Question
Buyers sometimes see an ADU and immediately calculate how much rental income it could generate.

That potential income may be useful to your personal budget, but do not automatically assume it can be counted toward mortgage qualification.

Whether rental income from an ADU can be considered, and how much can be used, depends on the mortgage program, documentation, appraisal, occupancy plans, and other requirements.

Ask Before Building Your Budget Around It
If an ADU is an important reason you are considering a property, discuss it with your mortgage professional early. Explain how you intend to use the space and whether you are relying on anticipated rental income as part of your financial plan.

You may also want to ask your real estate professional about permits and available property information. An ADU can be an excellent feature, but it makes the property more than simply a house with an extra room.

Before assuming the additional space will strengthen your mortgage application or generate income immediately, understand how it will be treated in the transaction. That can help you evaluate the property based on what is actually possible rather than what you hope the extra space will provide.

05

Oct

By First Rate Financial Group

Financial Reports

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

While the Core PCE Index came in at 3.0%, below the expected 3.3%, overall inflation remains well above the Federal Reserve’s 2% target.

With inflation still running above the Federal Reserve’s target, there remains room for rates to stay elevated or potentially increase over the next several rate decisions if the Fed remains focused on restraining inflation.

The JOLTS job openings report has also revealed a larger-than-expected gap. Job growth across the board has been slowing, with growth concentrated in only a handful of sectors.

The nonfarm payroll figures have also come in well below expectations, while the unemployment rate remains elevated on a year-over-year basis when compared with historical levels over the past decade.

PCE Index
PCE increased 3.4% from a year earlier, while core PCE—which excludes food and energy—increased 3.0%. Both were still above the Fed’s 2% target.

JOLTs Job Openings
Job openings fell to 7.08 million in August, down from a revised 7.34 million in July and below economists’ expectations of 7.23 million. The job openings rate declined to 4.3%, signaling continued cooling in labor demand.

Non-farm Payroll
Average hourly earnings increased 0.1% in September to $37.81, bringing annual wage growth to 3.0%. Wage growth slowed from 3.1% in August, providing a more favorable signal for inflation and interest rates.

Primary Mortgage Market Survey Index

15-Year FRM rates saw an increase of 0.18%, bringing the current rate to 6.60%.
30-Year FRM rates saw an increase of 0.25%, bringing the current rate to 7.28%.

MND Rate Index

30-Year FHA rates saw an increase of 0.05%, with current rate at 7.20%.
30-Year VA rates saw an increase of 0.04%, with current rate at 7.21%.

Jobless Claims
Initial Claims were reported to be 197,000 compared to the expected claims of 200,000. The previous week landed at 202,000.

What’s Ahead
The following week will be relatively light, with the Consumer Sentiment Report being the largest release, alongside major bill and bond auctions. There are also a couple of key speeches from Federal Reserve members that could provide forward guidance on future rate decisions.

02

Oct

By First Rate Financial Group

Home Buyer Tips

What Happens When Your Closing Date Gets Pushed Back?

You scheduled the movers, arranged time off work, started packing, and expected to receive the keys on Friday. Then you learn that closing needs to be delayed. Even a short change in the closing date can affect more than moving day, which is why buyers should understand what may need attention when the timeline changes.

The Mortgage Timeline May Need Attention
A mortgage transaction contains several items tied to specific time periods.

Depending on the circumstances, a closing delay could affect documents, verifications, or other time-sensitive portions of the loan process.

One important example is an interest rate lock. Rate locks generally apply for a defined period. If closing moves beyond that period, buyers should find out whether an extension is necessary and whether any cost or other conditions are associated with it.

Your Cash-to-Close Numbers Can Change
Changing the closing date can sometimes change certain amounts shown in the transaction.

Prepaid interest is one example because the amount can depend partly on the date the loan closes. Other prorated items associated with the transaction may also need to be recalculated.

That means buyers should review updated closing information rather than assuming every number will remain exactly the same.

The Moving Plan May Need to Move Too
The financial side is only part of the inconvenience.

Movers, utility transfers, deliveries, time off work, temporary lodging, and the end of a lease may all have been scheduled around the original closing date.

Whenever possible, avoid creating a schedule that leaves absolutely no flexibility between closing and another major deadline. A small cushion can be extremely valuable if the transaction shifts by a day or two.

Do Not Assume You Have the House Until Closing Is Complete
Buyers can understandably become excited once the closing date is placed on the calendar, but it is important to remember that the transaction still has steps to complete. Avoid making irreversible plans based solely on an anticipated closing date.

If a delay occurs, ask what caused it, what remains outstanding, and whether anything is needed from you. Also confirm whether the change affects your mortgage, funds required, rate lock, insurance, or other arrangements.

Most buyers hope for a perfectly predictable closing. Real estate transactions, however, involve multiple parties and moving pieces. Planning for a little flexibility can make an unexpected delay far less disruptive and help keep the focus where it belongs: successfully completing the purchase and getting the keys.