Buying a Home Doesn't Always Mean Liquidating Investments

By George Koutsos, Senior Vice President, CrossCountry Mortgage

When a client tells their financial planner they're thinking about buying a home, one of the first questions is often where the money for the purchase will come from.

For clients with significant investment assets, the obvious answer may appear to be the portfolio.

But it doesn't have to be the only answer.

There may be financing strategies that can help a client purchase the home while allowing more of their assets to remain invested and continue benefiting from potential long-term growth and compounding.

That's a conversation my team and I are happy to have together with the client and their financial planner.

There May Be Another Way to Structure the Purchase

Every client's situation is different, but today's mortgage market offers considerably more than a traditional 30-year mortgage.

Depending on the client's circumstances, we may be able to explore options such as:

• Bridge financing to help a client purchase before selling another property

• HELOCs that may provide access to existing home equity

• Asset-based or asset-depletion programs for clients with significant investment assets

• Jumbo and portfolio financing for larger or more complex transactions

• Interest-only options when appropriate and available

These aren't recommendations that one strategy is better than another.

They're simply options worth understanding before a client decides how to fund the purchase.

Why I Want the Financial Planner Involved

If a client has spent years building an investment portfolio with their financial planner, I respect the strategy that's already in place.

I don't want the mortgage conversation happening separately from it.

If a client is considering pulling $200,000, $500,000 or more from investments to purchase a home, let's have a conversation first.

The financial planner understands the client's broader financial objectives. We understand the mortgage programs and financing structures available.

Together, we can put the options in front of the client and let them make an informed decision.

It may turn out that using the assets makes perfect sense.

Or there may be a bridge loan, HELOC, asset-based mortgage or another financing structure that gives the client an alternative they hadn't considered.

The value is in knowing those options exist.

Protecting the Bigger Financial Picture

For many clients, buying a home is one of the largest financial transactions they'll ever make.

But it isn't their only financial goal.

They may also be planning for retirement, building wealth, managing investments, purchasing additional real estate or preparing to transfer assets to the next generation.

A home purchase shouldn't unnecessarily disrupt those plans simply because no one stopped to explore the financing alternatives.

That's where I think mortgage professionals and financial planners can work extremely well together.

You know the client's financial plan.

We know the lending options.

Let's put those two perspectives together.

Before Your Client Liquidates Assets, Let's Talk

If you're a financial planner and one of your clients tells you they're considering purchasing a primary residence, second home or investment property, bring us into the conversation early.

We don't need to make it complicated.

Tell us what the client is trying to accomplish, and we'll show you and the client the financing options that may be available.

Then you can have the conversation together.

The goal isn't to convince the client to borrow more or invest more. It's to make sure they understand their options before making a major financial decision.

Sometimes the right answer may be using the assets.

Sometimes there may be a better financing structure.

Either way, it's a conversation worth having.

George Koutsos
Senior Vice President
CrossCountry Mortgage
781-864-0889
george@teamGK.com
GeorgeKoutsos.com
NMLS 29613

Mortgage programs, bridge loans, HELOCs, asset-based financing, interest-only options and other financing strategies are subject to eligibility, underwriting requirements and program availability. Investment returns are not guaranteed. This article is for informational purposes only and is not investment, tax or financial-planning advice.