We have a client we’ll call David (not his real name). He needs a new roof on his home and wanted to pay for it by refinancing his mortgage. (By the way, if you live out of state, you may not realize how pricey a Florida tile roof can be. They can easily run $20,000 to $40,000 or more on a modest sized home).
Anyway, David approached his bank, which currently holds the mortgage on his house, thinking they would give him better service and a better deal. After all, it’s a fancy big-name bank with an up-scale reputation.
Unfortunately, we soon realized they must have assigned to him the dimmest and most-ineffective mortgage team in the entire state.
First, the bank complained that David didn’t have enough equity in the home. Then they told him they would do the refi only if he withdrew a substantial sum of income from his accounts every month. Then they told him he couldn’t qualify because his money was in a Revocable Trust account and he would have to take out all the money, change his estate planning arrangements, and put the funds into an individual account before proceeding. Say what??
We tried to reason with the mortgage rep, to no avail. The money in the Revocable Trust is all his, we said. It’s under his Social Security number and belongs solely to him. There’s no valid reason to force him to withdraw it from the Trust. No dice, said the bank and their legal department (which incomprehensibly, seemed to completely misunderstand what a Revocable Trust really is). We were at a total standstill.
David continued to struggle with the bank. He was facing two options, both bad. One was totally giving up the refinancing attempt, which he needed to pay for a replacement roof.
The second bad option was pulling out of the Revocable Trust he set up under his attorney’s guidance, to provide for himself in the event he became incapacitated (David is now a widower).
He was almost at the point of giving up when we suggested he talk to a long-time mortgage contact of ours who has successfully handled mortgages for several other clients over the course of many, many years.
As financial planners, we have the luxury of working with many independent professionals – attorneys, CPAs, realtors, mortgage brokers – and learn from our own experience who gives great service and produces great results.
Long story short — within little over a week of working with our tried-and-true mortgage contact, David’s new mortgage was approved.
In fact, David – a veteran of the Korean war – obtained a low-cost VA mortgage at a below market rate (something his own bank rep told him was not possible). He obtained the mortgage without any fuss or financial contortions, using his own Trust and keeping his estate planning arrangements in place.
We’re beyond happy for David. He got a great new mortgage at a low rate and can upgrade his roof (critical in hurricane-prone Florida!). Plus, he’s a super sweet guy.
So here’s the lesson. There are some totally unqualified and unprofessional people practicing in financial services in our state and probably other states, as well.
We hope you don’t cross paths with them, because they’ll give you bad, uninformed and misleading advice that will cost you money and aggravation, waste your time, and perhaps prevent you from reaching your most-cherished goals.
When we work with our clients, we are always happy if we can point them toward proven and professional people who can make a difference in their quality of life. (And guess what? There’s never a cost or conflict of interest, because we don’t do commission-based investment or financial planning work, and do not pay or accept referral fees).
That’s the incredible power of the right referral. We saw it happen with our friend David, and observed the happiness and peace of mind it brought him.
The Takeaway: Don’t think you have to put up with bad, uninformed, or unprofessional service. You deserve better, and should get better. It’s all about picking the right partner who puts your interests first.
(Who knew? Boca-based financial writer Robyn Friedman recently reported for the Wall Street Journal that an astounding 21% of home buyers actually regretted their choice of mortgage lender due to “lack of communication, unmet promises and other problems.”)