Jan 7: 🚪 The "Backdoor" Wealth Move for 2026

How high earners are sheltering $7,000 tax-free this month. Also: Why "Ski Season" properties are currently printing money.

Author

Alex Veytsman
January 07, 2026

📬 The Lending Letter 🏠

Mid-Week Market Check: Rates Inch Down (Finally!) ✨

Happy Wednesday! ☕ We're officially a week into 2026, which means your New Year's resolutions are either going strong or you're already thinking "maybe next year." But here's some news that might actually make your week better: mortgage rates dropped slightly overnight. Not massive, but we'll take it! 🎉

📊 TODAY'S 30-YEAR FIXED RATE
6.19%
Down 0.01% from yesterday | According to Mortgage News Daily | January 7, 2026

🎯 The Micro-Movement That Actually Matters

Look, a 0.01% drop isn't going to make headlines or change your monthly payment dramatically. But here's what it DOES signal: rates are stabilizing after the holiday chaos. The bond market is catching its breath, lenders are back from vacation, and we're starting to see some actual price competition. 🤝

Think of it like the stock market on a Wednesday morning—not flashy, but steady. And in mortgage world? Steady is actually pretty good news. According to market analysts, this early January stability could set the tone for Q1. We're cautiously optimistic (which in finance-speak means "pleasantly surprised"). 📈

🗓️ Why January 8th Specifically Matters

Mid-week in early January is when the mortgage market truly wakes up from holiday mode. Lenders have updated their rate sheets, underwriters are back at full staff, and everyone's chasing Q1 targets. Translation? If you've been sitting on the fence about getting pre-approved or locking a rate, this is actually a solid window. Don't sleep on mid-week momentum! ⚡

💰 Lender Promos: January Opportunities Are Here

🏠 Looking for a Loan on Any Property? Primary residence, second home, or building your real estate portfolio? Fill out this quick form and we'll connect you with lenders who are aggressively competing for business this quarter.

🏢 Investment Property Goals? January is when serious investors make moves while everyone else is still in holiday mode. Connect with investment property specialists here who understand cash flow analysis like the back of their hand.

🏖️ Building Your STR Empire? Short-term rental financing has its own rules, and we know them all. Get connected with STR loan specialists here who'll help you maximize your Airbnb game plan.

🧠 Educational Corner: Cracking the DTI Code

Let's talk about something that trips up more borrowers than anything else: Debt-to-Income Ratio (DTI). This three-letter acronym can make or break your mortgage approval, so let's demystify it. 🔍

What Is DTI?
Simply put, it's the percentage of your gross monthly income that goes toward debt payments. Lenders use this to determine if you can handle a mortgage payment on top of your existing obligations.

📐 The Math Breakdown

Front-End DTI (Housing Ratio):
This only looks at housing costs divided by gross income. Most lenders want this below 28%.

Example: You make $8,000/month gross. Your proposed mortgage payment (including taxes and insurance) is $2,000. That's a 25% front-end DTI. ✅

Back-End DTI (Total Debt Ratio):
This includes ALL monthly debt—mortgage, car loans, student loans, credit cards, even that Peloton payment. According to Consumer Financial Protection Bureau guidelines, most conventional loans want this at 43% or below (though some programs go higher).

Same Example: $8,000/month income, $2,000 mortgage, $400 car payment, $200 student loan, $150 credit card minimums = $2,750 total debt. That's 34.4% back-end DTI. Still good! ✅

💡 Pro Strategies to Lower Your DTI Fast

1. Pay Off Small Balances
If you have a car loan with 6 months left and $1,200 remaining, paying it off drops your monthly debt by $200. That can improve your DTI enough to qualify or get better terms. Bankrate's analysis shows this is one of the fastest ways to improve your borrowing power. 🚗

2. The Credit Card Balance Trick
Lenders use the statement balance to calculate minimum payments. Pay down cards before your statement closes, and suddenly that $5,000 balance that required a $150 minimum payment becomes a $500 balance with a $25 minimum. Same debt, better DTI. 💳

3. Student Loan Payment Calculations
Here's something wild: If your student loans are in deferment or forbearance, lenders might use 0.5% to 1% of the total balance as your "payment" for DTI purposes. A $50,000 loan in deferment could count as a $500/month payment even though you're not paying anything. Solution? Consider getting on an income-driven repayment plan with a calculated payment (even if it's $0), because Fannie Mae will use that documented payment instead of the calculation. 🎓

4. Increase Your Income (Strategically)
Got a side hustle or commission income? If you can document it for 2+ years, it counts. But here's the catch: inconsistent income gets averaged over 24 months and might hurt more than help. Consistency is key. 📊

🏘️ For the STR Crowd: January Is Your Secret Weapon

While everyone else is recovering from holiday spending, smart STR operators are making power moves. Here's why January rocks for short-term rental investing: 🎯

Ski Season Is PEAKING
Properties near ski resorts are printing money right now. January through early March is the sweet spot, and if you're financing an STR property in Tahoe, Aspen, Park City, or anywhere with powder, lenders will actually use projected rental income in your approval. Snow = cash flow = easier approvals. ⛷️

Tax Season Prep = Opportunity
Any STR property you closed on in 2025 can start generating tax deductions on your 2025 return. Depreciation, mortgage interest, property taxes, even that trip to "inspect" the property. Speaking of which, have you looked into a cost segregation study? It could accelerate $20,000-$50,000+ in deductions. Not a typo. 💰

Furnish Now, Book Later
Need to furnish that new property before spring booking season? We've got a partner offering 0% interest funding for furniture and amenities. It's literally free money for 12-18 months. Use it to create an Instagram-worthy space that books itself. 📸

🎓 Personal Finance Power Play: The Backdoor Roth Maneuver

💰 For High Earners Who Can't Do a Regular Roth IRA

Here's a move that sounds sketchy but is 100% IRS-approved: the Backdoor Roth IRA. If you make too much to contribute to a Roth IRA directly (over $161,000 single or $240,000 married for 2026), you can still get money into a Roth through the back door. 🚪

How It Works:

Step 1: Contribute to a traditional IRA (anyone can do this regardless of income). The 2026 limit is $7,000 ($8,000 if you're 50+).

Step 2: Immediately convert that traditional IRA to a Roth IRA. Since you haven't taken any deductions and the money hasn't grown, there's no tax on the conversion.

Step 3: Boom. Money's in your Roth, growing tax-free forever. According to Investopedia's guide, this is one of the most powerful strategies for high earners. 🎯

The Pro-Rata Rule Gotcha:
Here's where people mess up. If you have OTHER traditional IRA money sitting around with pre-tax contributions, the IRS makes you convert proportionally from all your IRAs. This creates a tax headache. Solution? Roll old traditional IRA money into your 401(k) before doing the backdoor conversion, if your plan allows it. White Coat Investor has an excellent deep-dive on navigating this. 📚

Why This Matters for Real Estate Investors:
If you're crushing it with rental income and pushing into higher tax brackets, tax-free growth becomes HUGE. That $7,000 growing at 10% for 30 years = $122,000+ tax-free. Do it every year? We're talking serious wealth building that Uncle Sam can't touch. 🚀

Action Item: Do this early in the year. Make the contribution in January, convert it in January, and avoid any tax complications from market gains. Clean and simple.

📊 Market Check: What January Data Is Telling Us

Let's talk about what's actually happening in the market right now (not speculation, just facts): 📈

Inventory Patterns Are Shifting
January typically sees the lowest inventory of the year, but this year is different. According to Realtor.com data, more sellers are listing in early January than usual, likely trying to catch buyer demand before spring competition heats up. This means more negotiating leverage for buyers right now. 🤝

The "Lock-In Effect" Is Real But Weakening
You know all those people who got 3% mortgages and refuse to sell? Zillow research shows that effect is starting to fade as life events (job changes, growing families, divorces, retirements) force moves regardless of rates. We're seeing gradual inventory improvement. 🏠

Cash Buyers Are Still Dominant
About 30% of purchases are all-cash, according to National Association of Realtors data. But here's the thing: if you're competing against cash, having a solid pre-approval and ability to close quickly can still win deals. Sellers care about certainty almost as much as price. ⚡

🎯 The Q1 Game Plan: Why NOW Actually Makes Sense

Everyone always asks "should I wait?" Here's the honest answer based on where we are on January 7, 2026: 🤔

The Case for Acting Now:

• Q1 Inventory Advantage
You're shopping when there's less competition. Come spring (March-June), every buyer comes out of hibernation. According to Redfin's seasonal data, properties listed in January get fewer offers on average than identical properties listed in April. Leverage that. 📉

• Lender Competition Is High
Everyone has Q1 quotas. January through March is when loan officers are hunting for deals to hit their numbers. This means better customer service, more flexibility on terms, and aggressive pricing. Get quotes now while you're the priority. ⭐

• You Can Always Refinance
If rates drop significantly later this year, you refinance. If they don't? You got a property at potentially a better price than you would have in spring. Freddie Mac research consistently shows that timing the rate market is nearly impossible, but timing the property market (inventory and competition) is very doable. 🎲

🚀 Your Move-Making Toolkit:

Ready to take action this quarter? Here's your complete resource list:

🌟 The Wednesday Wisdom

Look, 6.19% isn't sexy. It's not going to make you jump out of bed with excitement. But you know what's less sexy? Watching from the sidelines for another year while property values climb and that perfect investment opportunity gets snatched up by someone who was actually ready to act. 🎯

The smartest real estate investors I know don't wait for perfect conditions. They analyze deals, run the numbers, understand their DTI, optimize their tax strategy, and make moves when the fundamentals work—regardless of what talking heads on TV are saying about rate predictions. 📊

We're one week into 2026. You've got 51 more weeks to make this year count. Q1 is historically when the best deals happen because there's less noise and more opportunity. So the question isn't really "are rates perfect?" The question is: "Is there a deal that works at these rates?" 🤷

And if you need help answering that question, well, that's literally why we're here. Let's make some moves. 🚀

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See you tomorrow (Thursday) with more market insights and actionable strategies!

Disclaimer: This newsletter is for informational and entertainment purposes only. Rates and terms vary by lender and borrower qualifications. Always consult with a licensed mortgage professional, financial advisor, and tax professional for your specific situation. The Backdoor Roth IRA strategy requires careful execution and consideration of your complete financial picture.