The Jon Sanchez Show

Welcome to The Jon Sanchez Show and Estate Planning Wednesday.

Nearly every parent who creates an estate plan tells me the same thing:

“I don’t want my children fighting after I’m gone.”

So, they make what appears to be the safest possible decision. They divide everything equally.

Three children receive one-third each. Four children receive 25% each. Nobody can accuse Mom and Dad of playing favorites because everybody receives exactly the same percentage.

But is equal always fair?

What if one daughter spent ten years caring for her parents while her siblings lived in other states?

What if one child received $200,000 during the parents’ lifetime to start a business, while the other children received nothing?

What if one son worked on the family ranch for 20 years, helped build its value and wants to continue operating it—but his siblings want their inheritance in cash?

What if one child is financially responsible while another is facing addiction, divorce, creditors or an inability to manage money?

And what happens when parents leave the family home equally to three children—but one wants to live in it, one wants to rent it and the third wants to sell it immediately?

The trust may divide everything equally, yet the result can still feel profoundly unfair.

This is how an estate plan that looks perfectly balanced on paper can fracture a family in real life.

An inheritance dispute is rarely about money alone. It is usually money mixed with grief, childhood memories, sibling rivalries, perceived favoritism and decades of unresolved family history.

The old argument about who Mom loved most suddenly becomes an argument about the house, jewelry, firearms, family photographs or who was chosen to serve as trustee.

And when parents leave no explanation, their children create one.

“She received more because Mom loved her more.”

“He was named trustee because Dad trusted him more.”

“I did everything for our parents, and they treated me exactly like the children who never showed up.”

The reading of a trust should not be the first time a child discovers how their parents viewed the family.

Today, we are going to discuss the difference between equal and equitable, how to plan for a caregiver child, what to do with a family home or business, how to select the right trustee and why sentimental possessions can create larger fights than financial assets.

We will also discuss one of the most important pieces of estate planning: communicating the plan while the family can still ask questions.

Because a successful estate plan does more than transfer property.

It should also protect the family relationships that remain after you are gone.

The final gift you leave your children should not be a lawsuit against each other.

This is The Jon Sanchez Show.

When buyers tour a home, they usually evaluate the kitchen, bedrooms, neighborhood, backyard and asking price.

But today, the most valuable feature of a home may be something you cannot see.

It may be the seller’s mortgage.

The national average for a new 30-year fixed mortgage is approximately 7.5%. But millions of homeowners purchased or refinanced when rates were between 2% and 4%.

What if a buyer could purchase the house and take over that existing low-rate mortgage?

That is called a mortgage assumption.

Instead of obtaining an entirely new loan at today’s rate, a qualified buyer may be able to assume the seller’s remaining loan balance, interest rate, monthly payment and repayment term.

Not every mortgage can be assumed. Most conventional mortgages generally cannot. But FHA-insured mortgages are assumable, and certain VA and USDA loans may also be assumed, subject to their individual requirements.

At first glance, this sounds like a homebuyer’s dream.

Why borrow money at 7.5% when you may be able to borrow it at 3%?

But—as always—the details matter.

The buyer must generally qualify. The loan servicer must approve the assumption. The buyer receives only the seller’s remaining mortgage balance, not enough money to automatically purchase the entire house.

If the home is worth $600,000 and the seller owes only $350,000, the buyer must still cover the $250,000 equity gap—plus applicable closing costs.

That money may come from cash, the sale of another home, a second mortgage or some combination of those sources.

A 3% first mortgage combined with an expensive second loan may still be a good transaction—but the decision must be based upon the blended cost of the entire purchase, not simply the beautiful 3% headline.

VA assumptions introduce another important issue: the seller’s release from liability and restoration of the veteran’s entitlement. A transaction can close, yet the seller’s VA entitlement may remain connected to that mortgage if the assumption is not properly structured.

We also need to distinguish a legitimate mortgage assumption from purchasing a property “subject to” an existing mortgage.

With a formal assumption, the lender or loan servicer approves the qualified buyer and transfers responsibility under the established process.

In a subject-to transaction, the title may transfer while the mortgage remains in the seller’s name. That can leave the seller liable for the debt and potentially create serious contractual and legal problems.

Today, Cory Edge will explain how buyers and agents can identify homes with assumable loans—and how a seller can turn an existing low mortgage rate into a powerful marketing advantage.

Dwight Millard will explain the qualification process, monthly-payment savings, the equity-gap problem and the special considerations surrounding FHA and VA assumptions.

And I want to answer the ultimate financial question:

Is the buyer getting a tremendous mortgage—or using so much cash to capture that mortgage that the rest of the financial plan is placed at risk?

The next great real-estate bargain may not be hidden in the price of the house.

It may be hiding inside the mortgage.

This is The Jon Sanchez Show.

Welcome to The Jon Sanchez Show.

I want you to imagine opening your retirement-account statement and seeing a balance of $1 million.

You probably think, “I have $1 million saved for retirement.”

But if that money is sitting inside a traditional IRA or 401(k), you may not really have $1 million available to spend.

You have $1 million before taxes.

The IRS has been patiently waiting for its share.

For decades, Americans have been encouraged to contribute money to tax-deferred retirement accounts. You received a tax deduction, the investments grew without annual taxation, and you postponed paying the income tax until retirement.

That can be a very powerful strategy.

But tax-deferred never meant tax-free.

Eventually, the government wants its money. Under current law, required minimum distributions generally force money out of traditional retirement accounts beginning at age 73 for many retirees—and at age 75 for younger individuals covered by the later SECURE 2.0 timetable.

Those distributions can create a chain reaction.

They can increase your taxable income. They can cause more of your Social Security benefits to become taxable. They can increase your Medicare Part B and Part D premiums. They can push investment income into a higher tax bracket, and after one spouse dies, the survivor may face many of those same income sources while filing as a single taxpayer.

That is the retirement tax bomb.

The most frustrating part is that many retirees have a window of opportunity to reduce this problem—but they fail to use it.

That window may occur after they retire and their paycheck ends, but before required minimum distributions begin. It may also occur before Social Security, pensions and other income sources are fully activated.

During those years, the retiree may have more control over taxable income than at any other point in retirement.

They may be able to take strategic IRA withdrawals, complete partial Roth conversions, realize capital gains, make qualified charitable distributions or coordinate the timing of Social Security.

But if they do nothing, the IRS may eventually begin determining how much money must leave the retirement account each year.

Today, we are going to examine the four fuses attached to the retirement tax bomb: required minimum distributions, Social Security taxation, Medicare surcharges and the surviving-spouse tax trap.

Then we will discuss strategies that may allow retirees to defuse that bomb before it explodes.

Because a successful retirement plan should not merely ask, “How much money have you accumulated?”

It should ask, “How much of that money will you actually be allowed to keep?”

This is The Jon Sanchez Show.

There are days when the stock market appears to have completely lost its mind—and today may be one of them.

This morning, we learned that the United States created only 29,000 jobs during September. Economists were expecting approximately 90,000.

The unemployment rate increased from 4.1% to 4.2%. Average hourly earnings increased by only one-tenth of 1% for the month.

And then we received the revisions.

July’s previously reported gain of 21,000 jobs was revised all the way down to a loss of 10,000 jobs. August was revised from 162,000 jobs to 133,000. Altogether, 60,000 previously reported jobs disappeared from the books.

This wasn’t merely one disappointing month. The Bureau of Labor Statistics now says the economy has created an average of only 45,000 jobs per month during the past year.

So, naturally, the stock market rallied.

The Nasdaq reached a record high. Technology stocks surged, Treasury yields initially fell, and investors reduced their expectations for another Federal Reserve interest-rate increase in October.

Today, I want to change one question that nearly every homebuyer asks.

Most buyers begin by saying, “How much does the house cost?”

I think that is the wrong place to start.

The better question is: “What will this house cost me every single month—and can I comfortably afford that payment without sacrificing the rest of my financial life?”

The average 30-year mortgage rate just jumped from 7.03% to 7.28% in one week. That was the largest weekly increase in four years. We also have the 10-year Treasury trading above 5%, which continues to put upward pressure on mortgage rates.

So, if you are still shopping for a home the same way people did when mortgage rates were 3%, you are shopping in a market that no longer exists.

A home’s asking price is only the sticker price. The real price is the monthly payment.

That payment includes principal and interest, property taxes, homeowners insurance, possibly mortgage insurance, HOA fees, utilities, maintenance and the unexpected repairs that eventually come with owning any home.

As an example, borrowing $400,000 at approximately 7.28% produces a principal-and-interest payment of roughly $2,740 per month. At 6%, that same loan would be approximately $2,400 per month.

That is a difference of about $340 every month—and we haven’t even added taxes or insurance.

But here is where today’s conversation gets interesting.

A higher-rate market does not automatically mean there are no opportunities. It means the opportunity may have to be created.

Perhaps the seller reduces the price. Maybe the seller pays for a permanent or temporary interest-rate buydown. Maybe the buyer chooses a different loan structure, negotiates closing costs or finds a home that has been sitting on the market with a motivated seller.

The purchase price matters. The interest rate matters. The down payment matters. The seller concessions matter. But none of those numbers should be considered in isolation.

They must all work together to produce a payment the buyer can afford—not merely today, but when the furnace breaks, the insurance premium increases or life throws the family a financial curveball.

And here is my warning: never purchase a home that only works if you can refinance later. Refinancing should be a future opportunity, not the requirement that holds the entire plan together.

Today, we are going to show you how to reverse the traditional homebuying process.

Instead of finding a house, falling in love with it and then trying to force the financing to work, we are going to begin with the payment, build the financing around that payment and then find the right house.

Joining me are Realtor Aaron Clark and mortgage expert Dwight Millard.

Aaron, Dwight—let’s help our listeners stop shopping for a house and start shopping for a payment.

Welcome to Estate Planning Wednesday.

Let me begin with a statement that may surprise you:

Your trust can be perfectly legal, properly signed, and completely wrong for your family today.

That is because your estate plan was created for a particular moment in your life. It reflected the people you loved, the assets you owned, the laws in effect, and the decisions you had made at that time.

But your life did not stop changing the day you signed your trust.

Children grew up. Grandchildren were born. Parents passed away. Marriages began—and sometimes ended. You bought property, sold businesses, opened retirement accounts, accumulated more wealth, or moved to another state.

Meanwhile, your trust may still be operating under decisions you made 10, 15, or even 25 years ago.

So today, we’re answering an important question:

When is a simple amendment enough—and when is it time to restate your entire estate plan?

By the end of today’s show, I want you to be able to look at your own plan and place it into one of three categories:

1. My plan is still current.
2. My plan needs a limited amendment.
3. My plan needs a complete restatement.

For the last several years, we've been asking the same question:

When are mortgage rates coming back down?

Well, today I want to stop asking that question.

Because right now we're looking at mortgage rates above 7%.

The 10-year Treasury has moved above 5%.

And today the 30-year Treasury reached a level we haven't seen since 2002. Reuters

So here's my question:

What if rates DON'T come back down anytime soon?

I'm not predicting that.

Nobody sitting at this table knows where rates will be two years from now.

But let's conduct an experiment.

Let's assume 6%, 7%, maybe occasionally 8% mortgages remain part of American life.

Then we have a problem.

Because we can't keep solving a 2026 affordability problem by waiting for 2021 to come back.

Something has to change.

Maybe home prices change.

Maybe the houses themselves change.

Maybe we build them smaller.

Maybe we finance them differently.

Maybe sellers have to change their expectations.

Maybe builders change what they build.

Maybe buyers change what they expect their first home to look like.

Maybe families start living together differently.

Or maybe...

ALL OF IT changes.

So today Cory, Dwight and I aren't predicting mortgage rates.

We're asking something I think is much more interesting:

How does American housing have to change if rates stay right where they are?

I want to change the way you think about retirement today.

In fact, for the next hour, I don't even want to use the word retirement.

Because I think there's a better goal:

FINANCIAL INDEPENDENCE.

What's the difference?

Retirement usually means:

When can I stop working?

Financial independence asks:

When can I stop HAVING to work?

Those are two completely different questions.

Because what if you LOVE working?

Keep working.

What if you want to start a business?

Start it.

Want to work three days a week?

Work three.

Want to teach?

Teach.

Want to volunteer?

Volunteer.

Want to spend three months traveling?

Go.

Want to buy a ranch and spend Tuesday morning on a tractor?

Knock yourself out.

Financial independence doesn't tell you what to do.

It gives you the freedom to decide.

And THAT'S what I want to talk about today.

Not dying with the biggest investment account.

Not retiring at some arbitrary age because society says 65.

But reaching the point where your money can support your life...

and your life no longer has to revolve around making money.

I want you to imagine something today.

You open your retirement account tomorrow morning...

and:

$100,000 IS GONE.

You'd lose your mind.

You'd call your financial adviser.

Your CPA.

Your spouse.

Maybe the police.

You'd want to know:

WHERE THE HECK DID MY $100,000 GO?

But here's what's interesting.

What if you didn't lose $100,000 overnight?

What if you lost $10,000 here...

$7,000 there...

$15,000 somewhere else...

over five or ten years?

Would you even notice?

Because after more than 30 years in financial services, I've learned something:

The retirement mistakes that hurt people aren't always catastrophic.

Sometimes they're boring.

A bad tax decision.

Too much cash sitting around.

Helping the kids when you really can't afford it.

Buying too much car.

Selling investments because you're scared.

Carrying expensive debt.

Paying fees you don't understand.

Individually, none of them destroys your retirement.

But put ten of them together?

There goes $100,000.

Maybe $200,000.

Maybe considerably more.

So today we're going hunting.

We're looking for 10 quiet retirement mistakes that can slowly steal $100,000 from your future.

And I'm betting almost everybody listening is making at least one of them.

I've got a question for homeowners today.

And I think millions of Americans are wrestling with it.

You bought or refinanced your house several years ago.

Your mortgage rate:

3%.

Maybe even 2-point-something.

You probably brag about that mortgage.

And you should.

Because today, according to Mortgage News Daily, the average top-tier 30-year fixed mortgage rate is:

7.37%.

That's more than double your rate. Mortgage News Daily

So you're sitting there thinking:

‘Jon, they'll have to pry this mortgage out of my cold dead hands.’

I get it.

But then something happens.

You find THE HOUSE.

Maybe it's the ranch you've always wanted.

Maybe it's the house with the three-car garage.

Maybe you need another bedroom.

Maybe you're tired of your neighborhood.

Maybe you're retiring and this is where you want to spend the next 20 years.

And suddenly you've got a problem.

You don't just have to buy the new house.

You have to give up one of the greatest financial assets you own:

Your 3% mortgage.

And this isn't some tiny group of people.

As of the first quarter, 19.5% of outstanding mortgages were still at 3% or below. Realtor

So today Aaron, Dwight and I are answering one question:

When does it make sense to give up a 3% mortgage?

Because eventually there's a point where protecting the mortgage may start interfering with living the life you actually want.

And today we're going to find that point.”