We Got a Client $1.6M at 2.875% Fixed

(This post previously appeared on LinkedIn.)

By Palash S. Islam

I recently posted on financial industry thought leader Michael Kitces’ Twitter page that we worked with a large financial institution to help our client purchase a $2.0 million home with a $1.6 million, 30-year fixed-rate mortgage of 2.875%.

As this rate was far lower than anything most people could secure, his Twitter users – largely Financial Advisors – were extremely skeptical. Most, in fact, said it was impossible for me to do this.

Well, it wasn’t — you just need to know how.

Since beginning my financial services career in 2001, my team and I — with focus and intention — created an innovative and proactive financial services firm.

The following example – financing a $1.6 million mortgage for a client in August 2019 – provides a really good illustration of our hand’s-on approach. Here are some of the steps we take to provide world-class service and results for our clients:

Take the time to establish relationships. Our work is not transactional with clients or lenders. We invest in building relationships – and it has paid off. Over the years, I have built relationships with multiple private and public banks, credit unions and mortgage brokers. We’ve worked together for years – and my team and the brokers and lenders have mutual respect for each other.

Tip: We let our relationships at these institutions know that we are shopping for a new mortgage. We are transparent from the outset that the only goal we have is getting our client the best available option.

Be straightforward. Don’t waste anyone’s time. This doesn’t have to be a game of back and forth. When we request a rate estimate, it’s almost always better than if a client asks for it himself or herself because our lender relationships have an understanding of the financial profiles of our client.

Tip: We privately send the client profile (approx. home value, loan amount, credit score, income, etc.) to each of the institutions and asked the lender – right at the outset – for a “best-and-final” quote. No back-and-forth.

Understand the lender’s point-of-view (POV), too.  We insist on understanding the market from the lenders’ point of view. What is their objective? What types of clients are they currently looking for? Their minimum requirements needed to close? Rates differ as much with zip codes as they do with how much income or assets a client may have. Each bank is different in the profile it is looking to serve. And refinance rates are very different than purchase rates. Some banks also offer loans for specific professions (like a physician) where the rates and down payment amounts are much lower.

Tip: Because of our close relationships with the lenders, they regularly share the types of promotions that may be in effect now or coming up in the future. They also let us know what types of clients they are looking for.

Our goal: Leverage “best and final.” Many banks will reduce their rates further if you transfer assets to them and/or their investment arm. This actually provides us with leverage as our clients have substantial assets. We will recommend transferring assets to a bank or having additional cash in the checking/savings account in order to lower the rate up to 0.5% (Remember, you can move the assets back after the mortgage closes. Note: There may be some restrictions or time frames money must remain at the institution prior to transfer.)

Tip: Once you get a “best-and-final” offer, find out how much more you can lower the rate with a transfer of assets. Many times you can also get a competitors best and final and match with other promotions.

So, in our mortgage scenario, I had a big bank match the best rate and price on a purchase (3.375%) and then we moved the client’s assets over to them, which reduced the rate by an additional 0.5% (for a final rate of 2.875%)

Net-net: We got this client a $1.6 million, 30-year fixed mortgage at 2.875%.

Case study for illustrative purposes only. Individual results and circumstances may differ.

Palash S. Islam is the owner of Synergy Financial Group, LTD. He is also a Board Certified Financial Planner (CFP®) and Behavioral Financial Advisor (BFA™). Securities and Advisory Services offered through KMS Financial Services, Inc. Synergy Financial Group and KMS are separate and unaffiliated.

We work with clients who earn in excess of $1 million per year with a net worth greater than $10 million. 

For more information, please visit WWW.SYNERGYFG.COM.

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