Tyler End, CEO and Co-Founder of Retirable, who is a Certified Financial Planner, had someone come in [to his office] a couple of years ago. They said, “‘Hey, we really want to buy a house,’ but they had all these little debts [that could impact their interest rates],” said End.
Explore More: 7 Worst States To Buy Property in the Next 5 Years, According to Real Estate Agents
Read More: 7 Reasons You Must Speak To a Financial Advisor Before Spending $50,000 or More
“They had a couple of credit cards they weren’t paying off on time; there were car loans, and stuff like that, and pretty high interest rates.”
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End told them, “Before you buy this house, you want to get all this stuff in order.”
The clients had a substantial amount of money in their investment accounts, considerable money in their checking accounts, but they were carrying all these debts, said End.
“We came up with a strategy where we, one by one, focused on using their funds and prioritized those debt payments.
“We knocked four or five of those credit lines off, and before they applied for their mortgage, they were able to get a better interest rate.” The client bought a house this year.
This scenario is just one of many ways financial advisors help their clients get all their ducks in a row, so they can lock in lower interest rates and make better financial decisions before investing in a home purchase. Here are five reasons why you should speak to a financial advisor before you buy a home in the next five years.
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1. Gets the Best Financial Outcome By Planning Early
When you’re thinking of buying a home is the time you should start talking to a financial advisor. The sooner, the better, said End.
“A lot of what you need to get the best financial outcome of the purchase, a financial advisor is going to help you with.”
End said that the right ratio of your savings should be going toward paying down debt, saving for retirement, and building up a cash or checking account so you can put down a bigger down payment.
Check Out: Mortgage Rates Are Dropping: 20 Housing Markets With the Most Affordable Home Prices
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2. Helps You Make Optimal Use of Your Money
Every time money comes in, ask yourself these questions:
Should I put it in my emergency fund checking or savings?
Should I save it for retirement or lock it into an IRA or 401K?
Or should I use it to pay down debt?
“If your goal is to buy a house in five years, a financial advisor [will] tell you the optimal use for those dollars,” said End.
3. Shows You How To Reach Your Home Buying Goals
A financial advisor can give you a strategy for paying down debt, so it lowers your credit ratio and you’ll get a better credit rating for the mortgage, said End.
“Having a bigger down payment as your mortgage payment will be less when you actually buy the house;
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End said that if you’re putting too much in your retirement accounts, you might have to delay buying a house because you won’t have enough [money] in your bank accounts for the minimum down payment.
“If you know what that goal is, the financial advisor is going to help you get there and tell you the best way to do it.”
4. Explains the “Real” Cost of Buying a Home
People don’t necessarily budget appropriately when they think of buying a house; they get hung up on the mortgage, but that’s just one piece of it, End said.
A financial advisor can help you understand the realistic costs associated with owning a home.
“What we see often is people saying, ‘Okay I’m paying $3,000 for rent, so I’ll just have a mortgage that’s $3,000,’ but it’s not the same thing,” End said.
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“Then you have to figure property taxes, homeowners insurance…then there are a lot of carrying costs associated with owning a home, not just upgrades but repairs.”
5. Advises You How To Set Up a Liquid Emergency Fund
A financial advisor can recommend strategies for saving your money that can be accessed and turned into cash right away. Certain financial products might yield a higher interest rate, but you won’t be able to access your money when you need it in any emergency.
End said people have told him they used a CD because it gave them 5% interest but when they needed to pay for a repair, they couldn’t access their money.
“What’s important here is you don’t lock up the money; that’s where people can get in trouble,” said End.
“Generally, you want to use something that is liquid, meaning you can access it at any time.”
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Fortunately, because interest rates are high, End recommends using a high-interest checking account so you can get that money out tomorrow if you want.
“You can build up a big buffer of three to six months of your income for emergency savings that you can tap at any time, ” he said.
But he said that requires discipline and not to be like, “Hey, I want to go to Paris to go to the Olympics.”
“It should be held away, and [you shouldn’t] touch it unless it’s an emergency.”
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This article originally appeared on GOBankingRates.com: 5 Reasons You Should Speak to a Financial Advisor Before You Buy a Home in the Next 5 Years
Baker McKenzie today announced that leading project finance lawyer Matthias Schemuth has joined the Firm’s Singapore office* as a Principal and Asia Pacific Co-Head of Projects in its Finance & Projects practice, alongside Partner Jon Ornolffson in Tokyo.
Matthias joins the Firm from DLA Piper, bringing more than 20 years of experience in the energy and infrastructure sectors across Asia Pacific. He advises sponsors, developers, commercial banks, multilateral lending agencies, and export credit agencies on the structuring and financing of large-scale projects. His practice also spans international banking, structured commodity and trade finance, with a strong focus on emerging markets. Matthias has been consistently recognised by Chambers Asia Pacific and Who’s Who Legal as a leading project finance practitioner.
James Huang, Managing Principal of Baker McKenzie Wong & Leow in Singapore, said: “We are excited to welcome Matthias to our team. His expertise and proven record in managing teams will be invaluable as we expand our regional and global finance offerings for clients.”
Emmanuel Hadjidakis, Asia Pacific Chair of Baker McKenzie’s Banking & Finance Practice, commented: “Asia Pacific is seeing strong momentum in infrastructure development, energy transition investments, and cross-border project financing, much of it centred in Singapore. Having Matthias on board will further enhance our ability to help clients seize opportunities in the region’s evolving energy and infrastructure markets.”
Steven Sieker, Baker McKenzie’s Asia Chief Executive, added: “Matthias’s appointment underscores Baker McKenzie’s continued commitment to investing in exceptional talent across key markets to support our clients in navigating today’s increasingly complex business and regulatory environment.”
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Matthias said: “I’m thrilled to join Baker McKenzie and contribute to its strong growth in Asia Pacific. The Firm’s global reach and local depth provide an unparalleled platform for delivering innovative projects and financing solutions to clients in this dynamic region.”
With more than 2,700 deal practitioners in more than 40 jurisdictions, Baker McKenzie is a transactional powerhouse. The Firm excels in complex, cross-border transactions; over 65% of our deals are multijurisdictional. The teams are a hybrid of ‘local’ and ‘global’, combining money-market sophistication with local excellence. The Firm’s Banking & Finance lawyers are ranked in more jurisdictions than any other firm by Chambers.
Matthias’s hire continues the expansion of Baker McKenzie’s global team. His joining follows the recent arrivals of Carole Turcotte in Toronto; Tom Oslovar in Palo Alto; Jenny Liu in New York and Palo Alto; Helen Johnson, Mark Thompson, Nick Benson, Kevin Heverin, James Wyatt and Michal Berkner in London; Jan Schubert in Frankfurt; Todd Beauchamp and Charles Weinstein in Washington DC; Dan Ouyang, Winfield Lau, and Ke (Ronnie) Li in Beijing, Shanghai, and Hong Kong; and Alexander Stathopoulos in Singapore.
*Baker McKenzie Wong & Leow is the member firm of Baker McKenzie in Singapore
The Federal Reserve gave investors an early Christmas present by lowering interest rates by 25 basis points (i.e., 0.25%) marking its third rate cut this year. In the past, a change like this in the “long end” of the interest rate yield curve has triggered a predictable, investable pattern. Typically, this pattern would be bearish for finance stocks, particularly banks—investors would buy bank stocks when rates rose and sell them as rates fell….
Dozens of protesters from the “Religious Zionist Reservists Forum” and the “Shared Service Forum” demonstrated Saturday evening outside the home of Finance Minister Bezalel Smotrich in Kedumim.
The protesters arrived with a direct and pointed message, centered on a symbolic “draft order,” calling on Smotrich to “enlist” on behalf of the State of Israel and oppose what they termed the “sham law” being advanced by MK Boaz Bismuth and the Knesset’s haredi parties.
Among the protesters in Kedumim were the parents of Sergeant First Class (res.) Amichai Oster, who fell in battle in Gaza. Amichai grew up in Karnei Shomron and studied at the Shavei Hevron yeshiva.
Protesters held signs reading: “Smotrich, enlist for us,” along with the symbolic “draft order,” calling on him to “enlist for the sake of the State’s security and to save the people’s army – stand against the bill proposed by Bismuth and the haredim!”
Parallel demonstrations were held outside the homes of MK Ohad Tal in Efrat and MK Michal Woldiger in Givat Shmuel.
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Representatives of the “Shared Service Forum” said: “We are members of the public that contributes the most, and we came here to say: Bezalel, without enlistment there will be no victory and no security. Do not abandon our values for the sake of the coalition. The exemption law is a strategic threat, and you bear the responsibility to stop it and lead a real, fair draft plan for a country in which we are all partners. It’s in your hands.”
