What does a mortgage financing advisor (really) do?
Financial broker, broker, financial advisor... these terms come up again and again in the world of finance, and more specifically in fields associated with real estate. But why? What are a real estate financing advisor’s tasks and responsibilities and what are the advantages of relying on them?
Achieving the dream of becoming a homeowner often requires putting all of the financial means at your disposal to use. The consequences associated with this decision are significant and merit particular care given to the consideration and implementation of this venture. You have a valuable ally in the face of this daunting undertaking: the mortgage financing advisor.
When can a mortgage financing advisor help you?
A financial advisor’s area of expertise is much broader than the title may lead you to believe. They can get involved right from the start of the venture, well before the mortgage, and their advice extends beyond the purchase: it covers the tax aspects in relation to the transaction, as well as pension planning and financial planning more generally. They review the sustainability of the acquisition and can continue to support you in the event of changes such as a new financial situation, a divorce, approaching retirement or simply during refinancing of your mortgage.
When you decide to become a homeowner, the first thing that needs to be done is to find the property. Faced with the range of possibilities, the financial advisor will be your ideal partner for calculating the budget that works for you, right from the start of your considerations. They help you to understand the various options available to you and to focus your search appropriately.
They can provide you with a mortgage certificate on this basis. This document constitutes proof that you are in a position to meet the costs of financing the property you are interested in. This gives you an advantage against other potential buyers and allows you to move quickly in the event that you fall in love with a property during a viewing.
On the topic of budget, there are rules implemented by FINMA which banks must comply with. There are also each individual’s imperatives: just because the calculations allow you to go up to a high monthly payment does not mean that you wish to do so. The financial advisor is very familiar with the financing rules and the various different institutions’ conditions, and they know how to make them line up with their clients’ interests because they are, above all, listening to their clients.
The financial advisor can also help you to find out how to supplement your personal funds, if necessary, with alternative solutions which allow you to buy a property with reduced personal funds or through implementation of a 3rd pillar for a deferred purchase.
Your advisor will also be responsible for approaching multiple institutions in order to verify the price of the property you are interested in. Banks apply their own systems to the valuation of properties. These systems can sometimes result in differences between the market price and the amount that the bank will agree to finance, according to its own appetite for risk.
Of course, this valuation is indicative because ultimately if you want to accept the market price then you need to have the additional funds available in order to allow you to cover this difference, but you are not prohibited from doing so.
Once the property has been found, you will be faced with several questions such as:
- What rate(s) should I choose for my future mortgage?
- What personal funds should I use?
- What term and what type of amortization should I choose?
- What are the tax implications for me?
- What will happen in the event of resale?
- What do I do if my life situation changes?
- How does inheritance work?
In order to answer all of these questions and all others which are likely to arise, the mortgage financing advisor will take in the situation in its entirety and not just stop at a simple rate comparison.
Certainly, there may be a cost difference between the rates offered by bank A or B, but if a resale will occur before the term of the rate, for example, then the difference in conditions may prove to cost more than the difference in the rate. The advisor will analyse all of the parameters in order to respond optimally to as many eventualities as possible. Their role is to take all factors into account in order to draw your attention to them and help you to make the best choice for you. They do the same for aspects relating to amortization.
Security following a property purchase
Purchasing a property is a long-term commitment and the long-term consequences of the venture must therefore also be taken into consideration.
Will you be able to repay your mortgage before retirement? Do you foresee a change of career? What would happen if your spouse were to die? Questions of this sort may seem premature and somewhat abstract when agreeing the mortgage, but they are essential. The mortgage financing advisor should make you aware of these points and explain the various solutions to you (pension planning, life insurance, LPP buybacks, etc.) so that you are able to make decisions which secure your purchase for the future.
What are the advantages of having recourse to a mortgage financing advisor?
There are numerous advantages to having recourse to a mortgage financing advisor, relating to multiple fields:
Time and money savings
They take care of recommending the best financial arrangement for your venture.
Negotiation of the best conditions owing to volume
They conduct auctions among market lenders for you and their influence allows them to negotiate favourable conditions.
They are a personal contact for you. You can ask them all your questions and they support you throughout the venture.
Global expertise and advice
They can also provide guidance on the tax aspects of your venture and on your pension planning.
The most important thing is that the financial advisor will adapt to your needs and your profile. Don’t understand any of it and want to let them take care of it? They can accompany you to various meetings and remain at your side wherever necessary. Want to stay in control and need to understand everything? They will answer all of your questions so that you can make your decisions.
How to choose the right mortgage financing advisor for you?
The very essence of the profession of financial advisor is to guide clients and to lead them to making their decisions with understanding of all of the parameters at the given moment (at the moment of realisation of their venture). The aim of this is to guarantee the best solution, as well as peace of mind for their future and that of their family.
In order for financial advisors to be able to provide their clients with the best possible advice, it is essential for them to be completely independent and impartial. The criteria for selection of a lender must depend solely on the client’s profile.
Although the performance of digital tools and comparison sites is constantly improving, a venture of this scope must take the human aspect into account above all. A real estate purchase entails a large number of decisions with far-reaching implications. The fear of making a mistake can result in elevated stress. Attentive listening and clear explanations allow for reassurance and advancement of the venture. Trust between you and your mortgage financing advisor is therefore essential.
At Resolve, we know that every venture and above all every client is different, with different sensitivities. That’s why we adapt to your needs so that your real estate purchase experience is as relaxed as possible.
Curious about how we can help you? Come and see us, without obligation.