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Dec 10: Last Call for 2025 Closings (Seriously) 🎄

Rates Drop a Hair & The Clock Is Ticking for Year-End Closings

Author

Alex Veytsman
December 10, 2025

🎄 The Lending Letter 🏡

Wednesday, December 10th: Rates Dip a Hair—And Why Two Weeks Matters

Happy Wednesday! ☕ Plot twist: rates actually went DOWN overnight. Not by much—we're talking a single basis point here—but after yesterday's uptick, we'll take the W. It's like finding a dollar in your jeans pocket. Small win, but it counts. 💵

Here's what's interesting about today: we're now exactly two weeks from Christmas, and if you're even remotely thinking about closing on a property before year-end, the clock is officially ticking. Not to create FOMO or anything, but... yeah, let's talk timelines. ⏰

📊 TODAY'S 30-YEAR FIXED RATE
6.35%
According to Mortgage News Daily | Down 0.01% from yesterday | As of 12/10/25

🎯 The December 10th Reality: Time Is Running Out

Look, I'm not here to stress you out during the holidays, but let's be real: if you want to close in 2025, you're looking at a pretty tight window. Most lenders need 30-45 days from application to closing under normal circumstances. Factor in holiday slowdowns, end-of-year processing backlogs, and the fact that half the mortgage industry will be on vacation next week? Yeah. 😬

But here's the thing: tight doesn't mean impossible. It just means you need to get your ducks in a row NOW. Like, today. Like, this morning. According to Rocket Mortgage data, the average closing timeline has actually compressed to about 43 days for purchases (refinances are faster). If you're a cash buyer or have everything ready to go, you might squeeze in before the ball drops. 🎊

⚡ The Year-End Rush Is Real

Lenders are simultaneously trying to hit their annual quotas AND prepare for vacation time. This creates a weird dynamic where some are incredibly motivated to close deals (read: willing to work weekends and waive certain fees), while others have basically checked out mentally. The key? Working with lenders who are still hungry. And we know exactly who those are. 😉

💰 Lender Promos: Last Call for 2025

🏠 Looking for a Loan on Any Property? Whether it's your dream home, a rental, or your third flip this year, fill out this form and we'll connect you with lenders who are actually staffed through the holidays and motivated to close before December 31st.

🏢 Investment Property? December closings for rentals = immediate tax deductions. Even if you only own the property for 21 days in 2025, you can start depreciating. Talk to investment specialists here who get the urgency.

🏖️ STR/Airbnb Financing? Want to be live for spring break bookings? You need to close yesterday. Get connected with STR loan experts who can fast-track qualified borrowers.

🧠 Educational Corner: Escrow Accounts Explained (And Why You Might Want to Avoid Them)

Let's talk about something most people just accept without questioning: escrow accounts. You know, where your lender collects extra money each month for property taxes and insurance, holds it in an account, and pays those bills for you when they're due. Sounds convenient, right? 🤔

Here's what they don't always tell you: you might be able to waive escrow. And depending on your situation, that could save you thousands of dollars that you could be investing or using elsewhere.

💡 How Escrow Actually Works

When you close on a property with an escrow account, you typically have to pay:

1. Initial Escrow Deposit
Usually 2-3 months of property taxes and insurance premiums upfront. On a $500,000 home with $7,000/year in taxes and $2,000/year in insurance, that's roughly $1,500-$2,250 sitting in escrow at closing. According to CFPB guidelines, lenders can't hold more than this without your permission.

2. Monthly Escrow Payments
Added to your mortgage payment. The lender estimates your annual taxes and insurance, divides by 12, and collects that amount monthly. The kicker? They often overestimate and keep a "cushion" (typically 2 months of payments) just in case. That's YOUR money sitting there earning nothing. 💸

3. Annual Escrow Analysis
Once a year, the lender reviews your account. If taxes or insurance went up, your payment increases. If there's a shortage, you might have to pay a lump sum OR have your monthly payment increased significantly to catch up. Fun times. 😑

🚫 When You Can (and Should) Waive Escrow

Most lenders let you waive escrow if:

  • You put down 20% or more (conventional loans)
  • You're willing to pay a small fee (usually 0.125% - 0.25% higher rate or a one-time fee)
  • The loan isn't FHA or VA (those typically require escrow)

Why Would You Do This?

• Keep Your Money Working
That $1,500-$2,250 sitting in escrow? Put it in a high-yield savings account at 4.5% and it's earning you about $100/year. Not huge, but better than zero. Over 30 years, that adds up. More importantly, that 2-month cushion they require? That's potentially thousands of dollars you could invest elsewhere.

• Avoid Payment Shock
When property taxes spike (and they always do), your escrow analysis can cause your monthly payment to jump by hundreds of dollars. If you pay directly, you're already budgeting for it and can plan accordingly.

• Credit Card Points/Cash Back
Some people pay their property taxes with a credit card that offers cash back or points. If taxes are $10,000/year and you have a 2% cash back card, that's $200 back. Try doing that with an escrow account. 💳

The Catch: You have to be financially disciplined. If you're the type who would spend that tax money rather than saving it, escrow is probably a good forced savings mechanism. But if you're financially savvy, waiving escrow gives you more control and flexibility. According to NerdWallet's analysis, about 15% of homeowners who qualify choose to waive escrow, and most don't regret it.

Pro Move: Even if you waive escrow, set up an automatic monthly transfer to a separate savings account for taxes and insurance. That way you're still "paying yourself" monthly, but YOU control the money and earn interest on it. 🏦

🏘️ For Real Estate Investors: The December Tax Play You're Missing

Quick question: did you make money on real estate in 2025? If yes, have you thought about end-of-year tax loss harvesting? 🤓

Here's a strategy most investors overlook: If you have gains from property sales this year, you can offset them by selling underperforming stocks or other investments at a loss before December 31st. According to IRS rules, capital losses can offset capital gains dollar-for-dollar, regardless of whether they're real estate or securities.

Real Example:
You sold a rental property this year and netted $75,000 in profit. You also have some tech stocks you bought in 2021 that are down $30,000. By selling those stocks before year-end (and waiting 31 days before rebuying to avoid wash-sale rules), you reduce your 2025 taxable capital gains from $75,000 to $45,000. At a 15% capital gains rate, that's $4,500 in tax savings. 💰

For STR Investors: Speaking of tax strategy, have you explored cost segregation studies? These can accelerate depreciation and create paper losses that offset your STR income. Some investors save five figures or more in year one. The deadline to maximize 2025 benefits? Well, it's approaching fast. ⏰

More STR Resources:

🎓 Personal Finance Hack: The Mega Backdoor Roth (Not the Regular Backdoor)

💎 Advanced Move: Turbocharge Your Roth

Most people know about the backdoor Roth IRA (contribute to traditional IRA, immediately convert to Roth). But there's a mega backdoor Roth that lets you contribute up to $46,000 more per year if your employer's 401(k) plan allows it. Yes, you read that right. 🤯

Here's How It Works:

1. Max Out Your 401(k)
First, contribute the 2025 limit of $23,500 to your regular 401(k) (or $31,000 if you're over 50).

2. Make After-Tax Contributions
If your plan allows, you can make additional after-tax contributions. The combined limit (your contributions + employer match + after-tax) is $69,000 for 2025 ($76,500 if over 50). So if you maxed your $23,500 and your employer matched $5,000, you could potentially add another $40,500 in after-tax dollars.

3. Immediately Convert to Roth
Here's the magic: immediately roll those after-tax contributions into a Roth 401(k) or Roth IRA. Since they're already after-tax, there's no tax bill on the conversion. According to Investopedia's breakdown, you've just moved tens of thousands into a Roth where it grows tax-free forever. 🚀

The Catch:

  • Not all 401(k) plans allow after-tax contributions or in-service conversions. You need to check with your HR.
  • You need significant disposable income to make this work (obviously).
  • You have to do the conversion promptly to avoid earnings being taxed.

Why This Matters for Real Estate Investors:

If you had a great year flipping houses or your rental portfolio is crushing it, this is a way to shelter a massive amount of income from future taxes. That $46,000 growing tax-free for 20-30 years? At 8% annual returns, that single year's contribution becomes over $200,000 in retirement. And when you withdraw it? Not a penny of taxes. 💰

December Action Item: Check if your 401(k) allows after-tax contributions and in-plan conversions. If it does, you have three weeks to maximize this for 2025. Even if you can only do $10,000-$20,000, that's still a huge win. According to Fidelity research, only about 25% of eligible people actually use this strategy, which means 75% are leaving money on the table. Don't be in that 75%. 🎯

📊 Market Intel: What Actually Moved Rates This Week

Let's geek out for a second about why rates moved the way they did. Yesterday's uptick and today's slight drop weren't random—they're tied to bond market reactions to economic data. 🤓

Earlier this week, we got wholesale inflation data (Producer Price Index) that came in slightly hotter than expected. This made bond traders nervous that consumer inflation might follow, which pushed Treasury yields up, which pushed mortgage rates up. Classic chain reaction. But today, the market digested it, realized it wasn't catastrophic, and things calmed down a bit. 📉

According to MarketWatch, the 10-year Treasury yield (which mortgage rates roughly track) is hovering around 4.2-4.3%. This is actually down from where we were in early November, which is why you're seeing these sub-6.5% mortgage rates.

What's Next?
The Federal Reserve meets next week (December 17-18) and the market is pricing in about a 95% chance they'll cut rates by 0.25%. But remember: Fed rate cuts don't directly lower mortgage rates. The Fed controls short-term rates, and mortgages are long-term instruments. Sometimes mortgage rates actually go UP when the Fed cuts if inflation expectations rise. Counterintuitive, but that's bond math for you. 🤷

The real question is what they signal about 2026. If Fed Chair Powell hints at more cuts next year, that could create downward pressure on long-term rates. If he sounds cautious, rates might stay elevated. We'll break it all down in next Thursday's newsletter (assuming markets reopen after the Wednesday Fed announcement). 📰

🎯 Should You Lock Your Rate Right Now?

Real talk: if you're actively in contract or about to be, 6.35% is not a terrible rate to lock. We've seen significantly worse this year (remember when we were flirting with 7%?). And with only two weeks until Christmas, rate volatility could go either way. ⚡

Here's the calculus: Rates could drop another 0.1-0.2% if the Fed meeting goes dovish and economic data softens. Or they could spike if anything unexpected happens. With holiday trading volumes thin, even small news can create oversized moves. According to Freddie Mac data, December rate volatility has historically been 1.4x higher than average months due to lower liquidity. 📊

The Bottom Line: If you're closing soon, locking now protects you from downside risk. If you're flexible and can afford to float, maybe wait until after the Fed meeting next week. But either way, don't overthink it—rates in the 6% range are workable, especially when you factor in that mortgage interest is tax-deductible. Your effective rate after tax benefits is notably lower. 💡

🎯 Ready to Make Your Move?

Time is legitimately running out for 2025 closings. Here's your playbook:

🌟 The Bottom Line

December 10th is basically the mortgage industry's equivalent of "last call." If you're serious about closing in 2025, the window is narrow but not closed. The key is working with people who understand urgency and can move quickly. 🏃

Rates at 6.35% aren't going to make headlines, but they're workable. Combined with motivated sellers, year-end lender quotas, and immediate tax benefits for investors, December deals can actually be surprisingly good. You just need to move with purpose. ⚡

And hey, even if you're not closing in 2025, these next few weeks are perfect for positioning yourself for early 2026. Get pre-approved, start your property search, connect with the right lenders. Because when January hits and everyone else is finally done with their holiday hangovers, you'll already be three steps ahead. 🎯

Oh, and don't forget to check if your 401(k) allows mega backdoor Roth contributions. That's one of those things you'll either be really glad you did or really wish you had. Just saying. 😉

Stay sharp, stay informed, and remember: the early bird gets the worm. The late bird gets stuck in bidding wars next spring. 🐦

The Lending Letter
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See you tomorrow (Thursday) for more mortgage market reality checks and year-end strategies!

Disclaimer: This newsletter is for informational and entertainment purposes only. Rates and terms vary by lender and borrower qualifications. Always consult with licensed mortgage professionals and tax advisors for your specific situation. The mega backdoor Roth strategy requires specific 401(k) plan features and should be discussed with a financial advisor. Escrow waiver availability depends on loan type and lender requirements.