Sometimes borrowers don’t initially appreciate the value of working with a Certified Mortgage Planning Specialist® like me. They rhetorically ask, “Why would I have a problem going to my bank for a mortgage?” The answer is frequently wasted time, poor advice, lost investment opportunities, and tens of thousands of dollars in additional costs over the life of their loans.
Some Recent Examples:
- Scenario: Borrower is purchasing a $1.6M condo in NYC and applying for a $400K mortgage. His income and credit are excellent, and he has significant investments at “his bank.” Why wouldn’t they approve him?
Problem: Although he plans to eventually use this condo as his primary residence, he already owns a coop, but isn’t planning to sell it for many months. I told him that “his bank” will view this as an investment property and based on their guidelines, deny the loan. I had a solution that worked for him. Nevertheless, he applied with “his bank” anyway.
Result: His loan was denied and the self-serving “mortgage salesperson” at his bank convinced him to “cash out” the needed funds by refinancing his coop instead.
Consequences: When he sold his coop and paid off the mortgage, he lost forever his mortgage deduction. Because this borrower received the wrong advice, he would NEVER be able to deduct the mortgage interest on anything over a $100K mortgage on his new condo. By not heeding my advice, he’s now paying tens of thousands of dollars in extra income taxes that could easily have been avoided.
- Scenario: First time buyers are purchasing a $444K home and putting 20% down. They had good income, credit, and assets. His wife worked for a “Big Bank” and felt they would receive VIP treatment and an easy loan approval.
Problem: I informed them this “Big Bank” followed strict Fannie Mae guidelines. Due to a subtle issue I picked up on regarding the property, this bank’s strict interpretation of the guidelines would result in a loan denial. These buyers applied with their bank anyway.
Result: They returned to me five weeks later. My predictions proved accurate. However, with my help and guidance, they were able to close on their new home.
Consequences: Buyers, sellers, and realtors unnecessarily stressed out because of a loan denial that never should have happened.
- Scenario: Borrower is buying a home for $990K and wants a $500K mortgage. He has great credit and millions of dollars invested with a large, well known bank. He enjoys a private banking relationship with this bank and believes they will bend over backwards for him.
Problem: Upon reviewing his documents, I noticed that, while his total compensation was similar to prior years, his employer had recently changed the way he was paid. I explained to him that despite his private banking relationship, “his bank” would not count all of his income and would deny his loan. However, I had another solution. He didn’t believe me and applied to his bank.
Result: His “private banker” assured him, “No problem!” Weeks went by. No updates. The borrower called his bank numerous times and was told, “Everything’s fine!” Weeks turned into months. He learned of his loan denial via a form letter in the mail!
Consequences: He lost the house, lost face with his realtor, lost confidence in his private banker, and wasted a few thousand dollars on attorney, property inspection, and appraisal fees. However, when he found another property, he took my advice and worked with me. Sixty days later, he was the happy owner of a new home.
Despite the new banking regulations and mortgage shakedowns, the “Big Bank” culture still rewards slick-talking, yet marginally competent mortgage salespeople, saying anything to get the business…
and often failing to deliver.
Who will review your financial situation, uncover potential issues,
and address them before they become a larger problem?
Why would you entrust the largest investment of your life to anyone
but the most competent, qualified, and Certified Mortgage Planning Specialist®?
The rates and fees you’ll receive are about the same as if you went to “Your Bank.”
The big difference? Your loan will CLOSE.
Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.