A GUIDE TO MORTGAGE PLANNING A BETTER WAY TO BUY

Transcription

1 A GUIDE TO MORTGAGE PLANNING A BETTER WAY TO BUY

2 Table of Contents Introduction to mortgage planning What is mortgage planning? Why is mortgage planning important? Mortgage planning changes the conversation The Trusted Advisor Collaboration model What does mortgage planning look like? The Client Life Cycle The High Trust Interview About Scott Morris page 1 page 2 page 3 page 4 page 7 page 8 page 10 page 11 page 12

3 Introduction to Mortgage Planning A home mortgage whether it s your primary residence, a second home or an investment property is likely the single largest financial investment in your lifetime. Today, more than ever, a mortgage operates as a tool in achieving long and short-term financial goals. Receiving proper financial advice and guidance can save you tens of thousands of dollars over the life of your loans. When choosing your team of trusted advisors: Realtor, CPA, investment advisor, insurance advisor, estate planning attorney, etc. it pays to align yourself with a mortgage planner committed to understanding your unique goals. A trusted professional is someone who can educate you about the process, accurately assess your current financial situation, identify the best mortgage solutions and, above all, play a positive role in your overall financial plan. The collaboration between you and your team of trusted advisors allows you to make informed decisions that shape your future. This guide was created to assist you in understanding the benefits of mortgage planning and the importance of working with a Certified Mortgage Planning Specialist (CMPS ). HANDLE WITH CARE 1

4 What is Mortgage Planning? Mortgage Planning is the process of creating, implementing and managing mortgage solutions to achieve a client s unique financial and life goals. The strategy that is right for one client may be completely wrong for another. This is why mortgage planning should be conducted with a Certified Mortgage Planning Specialist (CMPS ) who is trained in the five CMPS skill sets: Mortgage & Real Estate Taxation understanding the tax implications of various mortgage strategies, and how to work as a team with CPAs, attorneys and financial advisors Housing, Financial & Mortgage Markets why interest rates fluctuate, and how to understand the housing, financial and mortgage markets Cash Flow Planning how to reduce debt, improve cash flow and identify mortgage planning opportunities around retirement planning, college funding, elder care, legacy planning and other life events Real Estate Investment Planning how to help real estate investors compare options and evaluate the impact of various mortgage strategies on their rate of return Ethics & Compliance acting in a trustworthy manner as a value-based, clientcentric organization 2

5 Why is Mortgage Planning Important? THE AMERICAN DREAM REAL Home ownership is often cited as the American dream. I believe the real American dream is much broader and is represented in 5-life goals most Americans pursue for their own financial well-being and that of the people (and institutions) they love. Five financial goals for living a life that matters: 1. The endowment of a long, comfortable and totally worry-free retirement, with no compromise in lifestyle, and no real concerns about ever running out of money. 2. The need or desire to intervene meaningfully in the financial lives of one s children, during one s lifetime and/or in the form of legacies. 3. The ability to fund, in whole or in part, the education of one s children and grandchildren. 4. The capability to provide quality care for parents in their later years. 5. The ability to contribute to a school, church, charity, or other institution. In the end, we all want to believe our life mattered. I believe this is accomplished, in large part, by positively impacting the lives of others. These 5-financial goals are worthy pursuits in creating a legacy and living a life that matters. Sadly, most people don t know how to begin the process of creating a plan to achieve these goals. In truth, it simply begins with asking the right questions. It begins with discovering what matters to you. What we HAVE DONE FOR Ourselves alone, dies with us. What we HAVE DONE for others and the world, remains and is immortal. Albert Pike 3

6 Mortgage Planning Changes the Conversation The mortgage is inherently a financial product which carries financial consequences that impact a homeowner s life. Mortgage Planning with a CMPS-certified professional helps a homeowner or homebuyer answer the most important questions associated with buying and financing a home. Most homeowners and prospective buyers don t know how to approach financing a home and tend to limit their questions to: 1. WHAT IS YOUR RATE? 2. WHAT ARE YOUR COSTS? WHAT MATTERS TO YOU? While these are important considerations they don t come close to addressing other important issues. A mortgage planner will ask questions designed to determine each client s unique objectives. I M GLAD YOU ASKED. 4

7 Mortgage Planning The conversation between client and trusted advisor should include and build upon the following questions: What am I really trying to accomplish with my housing situation? This is truly the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. According to a study by the Joint Center for Housing Studies at Harvard University the four major reasons people buy a home have nothing to do with money: Why is it better to buy a home right now vs. renting a home? Buying a home usually requires more upfront capital, more ongoing expenses and a longer term commitment. A certified professional can run the numbers to determine if you would be better off buying vs. renting. A good place to raise children and for them to get a good education A place where you and your family feel safe More space for you and your family Control of the space 5

8 Mortgage Planning How can I make sure this fits into my short-term and long-term budget? Make sure to strategize with a certified advisor and compare your options related to: Choosing a down payment amount and strategy Which mortgage and home buying strategy will result in less overall financial risk? A home is most likely your single largest investment and your mortgage the largest debt. This is why it is important to evaluate and compare your options with a Certified Mortgage Planning Specialist (CMPS ). Choosing a monthly payment scenario to fit your cash flow requirements Choosing a price range for your home How will this financial decision impact other areas of my life? Make sure you explore how your cash flow situation will impact: Children s education funding Retirement planning Taking care of elderly parents Legacy planning and other large purchases or commitments By assembling a team, a homeowner or buyer ensures they are making informed decisions about what matters most. The collaboration between you and your team of advisors: Real Estate Agent, Mortgage Planner, Financial Advisor, Accountant, Insurance Advisors and Estate Planning Attorney gives you the support you need to achieve your unique goals. 6

9 Trusted Advisor Collaboration ESTATE PLANNING ATTORNEY REAL ESTATE AGENT MORTGAGE ADVISOR LIFE AGENT YOU FINANCIAL ADVISOR INSURANCE AGENT PROPERTY & CASUALTY ACCOUNTANT Choose Wisely The real estate and mortgage markets are complex, highlyfragmented, and ever-changing. Whether you are buying, selling, or financing residential real estate, you will want to choose your team wisely a team that understands the macro and micro markets, develops and executes winning strategies, communicates clearly and, ultimately, achieves favorable results. Most importantly, you need to choose a team that understands what matters to you. 7

10 What Does Mortgage Planning Look Like? Mortgage planning is the process of evaluating mortgage options in the context of overall financial objectives. The strategy you use today carries financial consequences that can impact your life for years to come. A Certified Mortgage Planning Specialist (CMPS ) can help you understand your mortgage options and how they impact your overall financial plan. Here s how: Step 1: Initial Conversation The High Trust Interview The High Trust Interview focus on what matters to you as we explore: What are your housing objectives and why? What does your current cash flow situation look like? What large expenses should we take into account as we help you develop a budget for the future (education funding, retirement planning, elder care needs, legacy planning, etc.)? What can I do to help? Step 2: Analyze & Evaluate Your Options The next phase of our relationship will focus on: What are your housing, debt planning and cash flow options? What, if any, mortgage products and strategies would be useful to you? What is the likely short and long-term impact of these mortgage options on your overall financial situation? 8

11 What Does Mortgage Planning Look Like? Step 3: Develop & Implement Your Personal Mortgage Plan After we discuss your options, and the impact on your overall housing and financial situation, you can decide which plan works best for you. I will be here to answer any questions and be a resource to you in any way I can. I will also work in collaboration with the other trusted advisors on your team to ensure we are all serving your best interests. Step 4: Monitor Your Mortgage Plan through an Annual Mortgage and Housing Review Given the ever-changing marketplace and the realities of a shifting focus on personal lifestyle priorities it is a good idea to have an annual mortgage review. As your mortgage planner, it s my role to help you monitor these changes and discover opportunities congruent with your objectives. Most often, this process involves an assessment of: Your fluctuating cash flow needs Latest market interest rates and housing market conditions Family changes and life events such as: job changes, education funding, retirement planning and elder-care needs An assessment of your home equity 9

12 Client Life Cycle MARRIAGE, DIVORCE, AND RELATED ISSUES LEGACY PLANNING BUYING A FIRST HOME RETIREMENT, ELDER CARE AND HEALTH ISSUES Mortgage Planning is the process of helping our clients improve their lives through the proper use of various mortgage strategies GIVING BIRTH AND RAISING CHILDREN CHANGING CAREERS, STARTING OR SELLING A BUSINESS BUYING A 2ND HOME AND INVESTING IN REAL ESTATE Choose Wisely 10

13 The Hight Trust Interview because your future matters WHAT MATTERS TO YOU? I M GLAD YOU ASKED. Are you ready to begin? I d be honored to serve you as a member of your team of advisors. I invite you to call me to schedule your personal no-cost, no-obligation consultation. Our relationship is based on what matters to you, and begins with the High Trust Interview. Scott R. Morris Certified Mortgage Specialist (CMPS ) scott@srmhomenetwork.com 11

14 About Scott Morris PROFESSIONAL I am a Real Estate Broker and Certified Mortgage Planning Specialist (CMPS) with 30 years of experience. I have helped thousands of homeowners and prospective homeowners find, purchase, finance, and sell residential real estate resulting in volume in excess of one billion dollars. What makes me different? I take a financial planning approach to real estate acquisition and mortgage debt management. My clients have unique needs and goals. My specialty is assessing my client s objectives and working in concert with their other advisors determining the property and financing solution best-suited for their family. This collaboration provides my clients the support needed to achieve their unique goals. Personal What we have done for ourselves alone, dies with us; what we have done for others and the world remains and is immortal. -Albert Pike This is one of my favorite quotes. It reminds me of the importance of legacy-building and living a life that matters. In this pursuit, my passions center on family, friends, and community. In 2011, my son, Ryan, was diagnosed with Type 1 Diabetes (T1D). Finding a cure for T1D is one of my life pursuits and is the reason I joined the Board of Directors for JDRF s (Juvenile Diabetes Research Foundation) Los Angeles chapter. JDRF is the largest non-profit funder of T1D research in the world. I am also an avid baseball fan. I created Dreaming of Cooperstown, where I often blog about fatherhood, T1D advocacy, and baseball. ABOUT SRM REAL ESTATE GROUP SRM Real Estate Group is a full-service boutique real estate brokerage representing clients in the purchase, financing, and sale of residential real estate. SCOTT & KELLY MORRIS FAMILY Through our Homebuyer s Edge, SRM Partner Network, and Better Together Conversations that Matter initiatives, SRM Real Estate Group promotes a culture of collaboration and education. Our approach challenges the traditional real estate and mortgage brokerage models and offers our clients a better and more affordable way to find, buy, finance, and sell homes. Acknowledgments: Nick Murray: The Five Great Goals of Life, The Excellent Investment Advisor by Nick Murray The CMPS Institute Keeping Current Matters: 3 Questions to Ask Before Buying a Home 12

15 testimonials I can t say enough about our amazing experience working with Scott on getting into our first home. What started out as a casual online search in early 2014 turned into an introduction to Scott from a coworker. From that day, I knew we were in great hands. We worked with Scott from beginning to end on the house search/negotiations and the mortgage and couldn t be happier with him and his team. We found our perfect home and moved in last Fall! There is a lot of intimidation both in finding and buying a home in a seller s market. Because this was our first home purchase (and we are new to California) we had hundreds of questions. Scott not only had all of our answers, but he educated us on the process and taught us what to keep our eyes out for. Scott may be one of the most ethical & down to earth people we have ever met - something that is both hard to find and incredibly important in the business of Real Estate. We had the usual ups and downs that this market is known for but Scott guided us through all of this with incredible patience and truly expert advice. My wife and I had more than just an advocate on our side, but a coach, a mentor & a true professional. Our mortgage process was handled by Scott and his team flawlessly. What I thought would be the most difficult part of the home buying process was painless. Again, Scott presented us with a variety of options and made sure to get us into the right mortgage product from the right lender for our family. Scott answers his phone, works extremely hard and he made us feel like we were his only client. Without a doubt, we won t be doing any real estate business in California without consulting Scott and his team. If there were 10 stars - that would be our rating... we can t recommend Scott enough! Brad W. I have referred several clients to Scott Morris over the years. He is a man of integrity and will tell you the truth about loans, not what he thinks you want to hear. Straight-forward, knowledgeable, and ethical. Scott V. Our family will never sell a house again without using Scott Morris. Scott helped us sell our home in an uncertain market when we absolutely needed to. His intimate knowledge of the local neighborhood, decades of professional experience and litany of contacts in the real estate world were critical in our efforts to sell. There are many capable real estate professionals to choose from in Southern California but none possess Scott s unique combination of real estate knowledge, business acumen, personal touch and attention to detail. Most important to my wife and me, was the extra time and due care Scott took to ensure that our home sale was not just handled in the utmost professional manner, but with the highest level of ethical principles and respect. Thanks Scott, you are the BEST! Ian T. Five stars: sometimes they are given too freely, perhaps to reflect genuine effort, but not truly earned. For Scott Morris, five stars were definitely earned. Scott is an expert in his field; he knows his business and understands the nuances. He is the consummate professional. Yet not once during our loan real estate and loan process did Scott make my wife and I feel as if our opinions were not valid or were worthy of less consideration merely because we were not the real estate or loan professionals. I would wholeheartedly and without reservation recommend Scott; he is trustworthy, honest, hard working, and worthy of every star we (and others) have given him. Zareh and Natalie Scott Morris is one of the most honest, reliable, and enjoyable people with whom I have ever had the pleasure of working. He has both helped us with mortgage loans as well as represented us on the purchase of a home. I am also in the real estate industry and have worked with many others in it, and Scott stands out as a great example of what the standard should be, and how, when people are inherently good and go out of their way to treat others well, things get done. He has an excellent work ethic and I cannot recommend him enough. Greg S. 13

16 testimonials If you are looking for the best in the business to help you not only find a perfect home but also the best mortgage product, give Scott Morris a call. After looking at several houses at the end of last year, I decided to take a break on the house search. After some encouragement to restart my search from a friend during lunch -who also recommended talking to Scott things really changed quickly. Within a week of talking to Scott, we found the perfect house for me. Scott is so incredibly knowledgeable about the real estate market and his priority is getting you into the perfect home for you and the right mortgage based on your needs. Scott s expertise and guidance immediately made me feel very confident in my decision. Scott not only negotiated a fair price, he also worked very hard to get me into the right mortgage to purchase the house. Scott made the entire process very enlightening and enjoyable. It all felt very smooth and seamless. Even during a challenging and difficult time with the lender, Scott was such a quick and excellent problem solver that I never worried for a second. I always thought buying a house and applying for a mortgage was going to be a lot harder, but after working with Scott Morris I now believe- if you have someone like Scott on your side, it can be an easy and enjoyable process. Scott, I can t wait to buy my next home together and I hope that everyone is as lucky as I was to have you doing all the heavy lifting so I could enjoy the process. Thanks for everything! Jimmy B. I can t recommend Scott enough. Not only was he able to get us a great loan, but, when the rates went down after we were locked in, he redid the paperwork so we were able to get an even better rate. He didn t have to do this and we never would have known the difference, but he went above and beyond what we had expected. Scott even came by and picked up my paperwork when I wasn t able to get it to his office in time! I recommended him to both my sister and my neighbor who were very pleased. My neighbor even used Scott on a subsequent purchase. I can t say enough about how happy we were with the service we received and still receive from Scott Morris. Scott made us feel like he really cared about what we were going through in trying to buy a home. We never felt like he was just in it for the money, a feeling we have experienced over and over with other brokers. His attention to detail in the early stages of the process gave us confidence that everything would work out all the way through escrow. This is very unlike a lot of other brokers who promise the moon just to get you in and then it all blows up at the end leaving you very disappointed, something we experienced with other brokers. It s nice to deal with a true, honest professional these days. David and Jacqueline Thank you Scott Morris for making our dream of owning a home come true. We had a dream team making this happen! GOD is awesome. Thanks for answering all of our questions along the way. You even put up with our childish bickering in your office. You were so patient with us during our first-time home buying experience. We are truly grateful! Your team made the experience as painless as possible. Your hard work and dedication made our dream a reality. You guys are the dream team!! We are so excited to be in our beautiful home and we ve already started creating the memories we will cherish for a lifetime--as cheesy as that may sound. I will be sure to recommend Scott Morris to all of our friends and family in the LA area. You are the real deal! Whitney and Edwin Joanne K. You can view more 5-star Yelp testimonials by visiting my Yelp profile 14