Financial Planner/First time home buyer
Hi BPN!
My husband and I are in the process of trying to figure out if we are financially able to buy a house in the Bay.
I would say that we are very financially immature in terms of having savings/retirement/ general finances in order, and so I would love to have someone look at all our assets and give us a general overview of what it would mean financially to buy a house here, and also help give us a general guideline for what we should be doing for savings in general over the next few decades (for kids, for retirement, emergency funds, etc) and what type of income we should aim for.
Showing our immaturity, is this the role of a financial advisor? A financial planner? Are those the same things?
Any suggestions on people who have helped you sort this out would be greatly appreciated!
Parent Replies
As a general rule of thumb, if you are paying more than 35-40% of your income on housing, you are cost burdened. So in order to determine what you could afford as a mortgage, you'd take that number times your income, to determine your mortgage (plus other costs like property tax, insurance, utilities). Add in what you have for a down payment, and there's what you can afford on paper. Obviously in practice, people choose to cost burden themselves but that is very much an individual risk decision.
Beyond that, I think you might want a financial planner, if self help resources like Nolo Press books aren't enough for you. You could also look into if one of you has access to an EAP, which often have financial planning services included. A financial adviser is more like an investments adviser and sounds like you are not ready for that.
First, congrats on being willing to share where you are and ask for input! The financial services industry has lots of players so think about it more in terms of what licenses they have and how they get paid (% of vestments, fees for analysis, commissions on products). If you are looking for someone to analysis where you, recommend budget changes & savings options, invest for you, understand how all those those pieces work with your taxes, and offer you education along the way, you”ll want someone with a tax, securities, and insurance licenses.
My person has all of those, which is why I love working with her. Her company also offers free financial seminars for college savings, retirement, LTC, and general cash flow/budgeting. So not only is she helping me with my financial health, but I’m learning too. Her name is Nini Yang 408-464-7563. I also refinanced (when rates were amazingly low) with someone she works with. She’s well connected to the Bay Area financial world.
good luck and congrats on taking this step!
I'm not sure if he does consultations, but if so, we were SO impressed with Daniel Gat as our mortgage lender when we bought our house here in Berkeley last year. He is based half time in LA and half time in Bay Area. He walked us through every single detail of what documents we needed in order to purchase, got us fully pre-underwritten (not just pre-approved) and answered about 1,000 questions along the way. So maybe you could reach out to him and see if he does finance consultations, or could recommend someone else. His contact info is:
510.717.6510 - cell/direct
daniel [at] danielgat.com (daniel[at]danielgat[dot]com)
What you are looking for is a financial planner, and you probably want to look for someone who is a CFP, a certified financial planner. Given your needs, you probably want to find someone who will work for an hourly fee or who will do a comprehensive financial analysis for a fixed fee. Other ways financial planners charge for services are to charge a % of assets under management (and you would need to have a substantial amount that you wanted to have the planner manage for you for that to even be an option) or there are firms that make money from commissions (again, you'd have to be using them as an investment advisor and commissions put the advisor's and the client's interests out of alignment). Since you are looking for an analysis of your financial situation and not looking for someone to manage investments for you, those latter two payment structures don't work for you.
The National Association of Personal Financial Advisors (https://www.napfa.org/) is a good place to start. They have a lookup that can help you find fee-only (no commissions) planners in the area.