Which financial professional can help me choose a mortgage?
January 26, 2015 5:28 PM   Subscribe

I'm about to make an offer on a home. I've seen six different loan scenarios from two different lenders. The monthly payments and $ to close are all in the range that I can afford, so I will probably just pick one for the offer and pre-approval letter. I told my realtor that after the contract is accepted, I want to sit down with a CPA of some sort (yes Metafilter, fee-only) and figure out which is best for me, given my tax and employment and personal details that the lenders don't seem to want to consider. She said that she has never had a client ask for that before. Really?!

A quick search turns up certified mortgage planner, which sounds about right.

Example questions I want to ask this person:
-- I'm eligible for several different downpayment assistance programs as a first-time home buyer. Using these increases the interest rate, although it also reduces the amount of my to be withdrawn from my (Roth) IRA. What does my financial situation look like if I sell in 2 years (worst case scenario), 5 years, 10 years, etc. across different loan options?
-- Should I buy this weird tax certificate? It's like $1800, and my loan officer doesn't know if it evaporates if I refinance, and I might want to refinance because I'm looking at FHA loans and the MI never goes away...

You see where this is going. I'm good with spreadsheets, but I have never owned a home before and am unfamiliar with that milieu of tax deductions.

What is the name of this sort of professional, and what are the key words I should be looking for in lists of services offered? I don't really want someone who says "sure, I'll do that" and then turns out to know less about the DPA programs than I do.

I am expecting to pay maybe several hundred dollars for this; is that reasonable?

I'm in Montgomery County, MD if anyone wants to recommend a specific professional.
posted by ecsh to Work & Money (9 answers total) 2 users marked this as a favorite
 
I've only bought a house once, but our mortgage broker did everything you're looking for in addition to pre-approving us when we put an offer on our house and actually getting us the mortgage in the end. It sounds like maybe your mortgage broker is not doing a very good job.

Ancedata: I'm in WA state, your mileage may vary, etc.
posted by joan_holloway at 5:39 PM on January 26, 2015 [2 favorites]


I agree that a good mortgage broker should be happy to run the numbers of any scenario you can think of.
posted by rabbitrabbit at 5:48 PM on January 26, 2015 [1 favorite]


Response by poster: I'm not working with a mortgage broker. There are only five lenders that can service both of the DPA programs I'm eligible for, and I've been talking to loan officers at two of them.

Also, I believe that anyone who receives a commission from the lender I choose has a conflict of interest. I want someone who has a fiduciary duty to me only.
posted by ecsh at 5:51 PM on January 26, 2015


I don't know that a CPA would be that knowledgeable the specifics of mortgages aren't really their bailiwick. Perhaps the taxes portion...but most people I know educate themselves during the process and make a decision based upon their best understanding at the time.

To answer your question you might want to ask those questions of each loan officer. I'd send them out in an email, so you can have the responses back in writing.

The vagaries of these things are such that you're going to be hard put to get definitive answers from the banks, the state or anyone associated with the programs.

Perhaps a real estate lawyer/paralegal/tax lawyer can look over the paperwork to see where the gotchas are, but then you're talking serious money and at some point it's a questionable return on investment.
posted by Ruthless Bunny at 6:25 PM on January 26, 2015


You say you are good with spreadsheets - build a spreadsheet. The whole thing is pretty simple. You don't need an expert.

Excel is your friend.
posted by JPD at 6:45 PM on January 26, 2015 [2 favorites]


Do you do your own taxes?

If yes, then you probably should get fully up to speed on the details, figure out all the implications, and make this decision on your own, because you'll be the one who has to fill out the tax forms to claim whatever deductions or whatever else is involved.

If no, then use the person who does your taxes because they understand your "tax and employment and personal details" better than whoever you might bring in that is new to your situation.

Also consider the fact that the kinds of financial advisory services you're looking for are typically priced and marketed for rich people, or upper middle class. Meanwhile, downpayment assistance programs are typically not for the rich/UMC. That's the disconnect. Rich people don't need these programs, so advisors don't bother to learn them thoroughly or get much experience seeing them in action.
posted by Bentobox Humperdinck at 6:48 PM on January 26, 2015 [1 favorite]


Re the "weird tax certificate", from the page you linked:

DHCD's Maryland HomeCredit Program provides eligible homebuyers with a federal tax credit that may be claimed annually, the value of which is equal to 25% of the value of mortgage interest payments (up to $2,000) paid each year, for the life of the loan (i.e. until payoff, sale, refinance or transfer).


(Emphasis mine)
posted by rabbitrabbit at 8:27 PM on January 26, 2015


I am not a financial advisor in any way shape or form, but have a little experience With this type of homeownership program. You are asking great questions, but a CPA is probably not the person you need to help answer them. Have you gone through your homebuyer education classes yet (that will be a requirement of your DPA program)? The agencies that offer those courses (typically non-profits, not affiliated with a lender) may also be able to offer some additional resources. The CFPB is another good resource for general mortgage info, particularly around loan costs.

The other best tool I can recommend is the loan amortization template in excel. You can plug in all your different scenarios and see what the life of loan interest looks like, how much will be outstanding at any point in time, what happens if you make bigger down payment, extra payments, etc. That might help with your thoughts about possibly selling at different points in time. (I am refinancing my own mortgage as we speak and have spent all day happily plugging things into my loan am spreadsheets!)

Those weird tax credit things can be amazing. The price of that particular one is high but you would likely have it back in your pocket after the first year. It provides you a credit (not a deduction!) for a portion of your mortgage interest, and you still get the deduction for the remainder. Obviously I am not your tax advisor, but if your federal taxes exceed $2000 year, this can be a great tool. Maybe play with plugging it this year's taxes & see what it will do for you. You get to take the credit for the whole life of the loan and they usually can be re-issued if you refinance; you should be able to confirm that on their website or with one of your loan officers.

Also, if your first mortgage is going to be through the state homeownership program (usually the case when you are getting that kind of DPA), there won't be much difference from one lender to the next. Interest rates and other fees & charges are governed by the state so they should be pretty consistent - meaning you might just pick the lender who is giving the best customer service.
posted by tinymojo at 8:41 PM on January 26, 2015 [2 favorites]


Your situation is pleasantly complicated by several wonderful programs that exist in Maryland for first time home buyers. For the rest of us (outside Maryland) this is an easier set of questions. As mentioned, a Certified Financial Planner could run the numbers for you. See if you can find a fee only financial planner (paid hourly) to do this work. See www.napfa.org. This is not something that FP's specialize in typically, so you probably could ask some of your questions over the phone and see how impressed you are with the responses (before agreeing to work with them). Many of the planners will have routinely helped their ongoing clients who are buying homes in Maryland, and so they may have great advice for you. Other designations that would be on par with CFP are ChFc (chartered financial consultant) and CLU (chartered life underwriter). (The latter has much broader coursework requirements that you would think). Planners routinely charge $100+/hr for their analysis and discussions, depending on experience and credentials.
posted by Sonrisa at 11:16 PM on January 26, 2015


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