Reach out to Cpas and Their Clients

Reach Out to CPAs and Their Clients

Using the “Secure Your Financial Future”

Mortgage Rate Update

Tax time is upon us once again! CPAs and tax preparers will be meeting with their clients to assist in evaluating their current tax structure and liabilities. A typical day will entail one of these professionals reviewing between six and ten financial profiles.

Loan originators should take the time to educate these referral partners about existing market conditions and loan program guidelines. It’s also important to condition them to be aware of opportunities to improve their client’s financial debt structure.It is truly an out of site, out of mind scenario, and you can’t assume that they know what to look for when it comes to a potential referral for you.

The questions provided below are included in the new “Secure Your Financial Future” Mortgage Rate Update. They are the questions that CPAs and tax preparers should be asking their clients. Also included with each question is an explanation for you regarding why the question should be asked and how you can educate your referral partner on the subject.

What is the current interest rate on your home mortgage and what type of loan program do you have? Why ask? Because the program that the individual currently has may very well be obsolete given their current circumstances and desires for tenure in the property. Additionally, make sure that you’re educating the tax professional about the fact that many consumers have three and five year adjustable rate mortgages that will “Roll Over” in the next couple of years; and now may be a good time to extend the fixed period before rates continue to rise. Yes, it’s true that many people will already have a more favorable interest rate than you could obtain through a refinance. However, the overall debt plan and structure could warrant a slightly higher rate in exchange for an extension in the loan term and possible debt consolidation. You should also educate the CPA about the fact that we currently have a “Flat” yield curve and that they likely have clients who obtained monthly adjustable rate mortgages over the past 36 months that have increased considerably. A fixed rate option may come at little to no increase in rate.

What is your current mortgage loan balance? Why ask? Because guidelines have changed, and many consumers could consolidate their current first and HELOC and take out a conforming loan which wasn’t available when the original indebtedness was taken.This data is also vital in the evaluation of a potential debt consolidation loan from an equity availability perspective.

How long do you intend to live in your home? Why ask? Because the length of time that a consumer wishes to live in the property will have a great impact upon the type of loan structure that is most appropriate for the borrower. As an example, many people have taken out thirty year fixed rate mortgages and now have decided that they won’t be in the property for an extended period of time. A three or five year adjustable might be more appropriate for their current needs.

At what age do you intend to be financially independent/retire?Why ask? Because this will have a significant impact upon not only the debt structure (Loan Term) but also should lead you into conversations about principle pre-payment and asset accumulation. If you are working with a CPA who takes an active planning role with their clients, then this would fit perfectly into the context of their planning meeting. Explain to the CPA that far too many times you see consumers who are 50 years of age and want to retire in 13 years but have in excess of 25 years left on their loan. This could lead to a discussion of either taking out a loan that improves cash flow for the purposes of investment OR obtaining financing with a shorter tenure, such as a 20- or 15-year mortgage.

Do you presently have revolving debt (credit card, equity lines of credit, etc.) in excess of $10,000? Why ask? Because not only does credit card debt create a non-tax deductible liability, but it also negatively impacts one’s credit score in most cases. The ability to consolidate debt via an equity line of credit or a cash out refinance can, in many cases, substantially improve cash flow both before and after tax.

Do you currently have a 529 plan established for your child’s education? Why ask? Because most tax preparers understand the value of setting aside money in a tax free vehicle for a child’s education and they’ll be impressed that you are aware of this strategy as well. Many consumers don’t realize that sending their child to an institution of higher learning fifteen years from now will require approximately a fifty thousand dollar investment “Right Now”! One way of achieving this is by using the equity in your property to fund this important investment vehicle.

Do you have a desire to purchase real estate for investment purposes? Why ask? Because many consumers wish to diversify their investments and own more than one piece of property. Owning investment property requires significant education about issues such as down payment requirements, loan structure, and qualifying ability. Additionally, many people will elect to use the equity they have in their property to fund a down payment.

Is maintaining adequate cash flow a challenge for you and your family on a monthly basis? Why ask? Because many people have overextended themselves in mortgage indebtedness. They need to have a more flexible loan structure that will allow them to utilize the equity in their home in creative ways, such as an option arm or interest only loan.

In conclusion, it’s important to understand that tax preparers and CPAs don’t know what to ask or look for. They are not aware of the numerous lending options that exist in the marketplace and perhaps most importantly, they are not creative by nature when it comes to financing choices. It is our job to educate them regarding what to look for on their clients’ and our behalf, and to inform them about the services we’re capable of providing. If you don’t do this, someone else might!

Next Action Steps

Beginning this week and on the same day every week, provide a minimum of 15 of the Secure Your Financial Future Mortgage Rate Update Flyers to each tax preparer or CPA you know. Ask them to place the flyers on their desk and hand them out to each client that they meet with.

Schedule a 15 to 30 minute meeting immediately, before they get too busy with tax season, to meet with CPAs and tax preparers. Educate them regarding the questions which they’ll need to condition themselves to ask their clients. Explain the reasons why the questions are important. The goal is to get their commitment to handing out your Mortgage Rate Update flyer as well.

Continue to educate them on a weekly basis regarding the areas where you can help their clients.
Call each tax preparer or CPA every two weeks. Leave them a message letting them know that you’re checking in to see if any of their clients may need a free evaluation of their debt structure or assistance with answering questions about their credit score.