Advisors can cut mortgage costs for clients

An analysis of home loans initiated since 2022 found borrowers have overpaid roughly $65 billion annually in excess interest, about $3,300 per household. Financial advisors can help clients compare mortgage offers and fit mortgage choices into broader investment, tax and cash-flow plans.

Many buyers accept the first mortgage offer they receive, a decision that can increase long-term interest costs. Advisors do not originate loans but can explain options, highlight trade-offs and help clients choose a mortgage that matches their financial goals. Alicia Fuller, founder of Coastal 360 Capital Advisors, said, “Even though we’re not going to be part of the signing process, we can be part of the education process,” and recommends that clients define their desired outcome before selecting a loan.

Advisors can direct clients to rate-comparison tools, recommend interviewing multiple lenders and help evaluate fees and loan terms. Fuller noted mortgage brokers may charge higher fees and that local banks sometimes offer lower prices than national lenders. Vincent Birardi, senior wealth advisor at Halbert Hargrove, advises testing lender proposals against other offers and using mortgage modeling tools. “Be thoughtful. Interview several mortgage lenders,” he said.

Choices about how to pay for a home vary. Some borrowers sell investments, others borrow against assets or combine approaches. Securities-based lending can suit some clients, while capital gains taxes can change the cost of selling investments. Advisors can show how each option affects household cash flow and long-term targets such as retirement, education or planned spending. Birardi said advisors try to anticipate cash-flow impacts and measure how a new mortgage could affect broader financial plans.

Regulatory limits affect the scope of advice. Advisors without mortgage licenses should avoid acting as mortgage brokers and refer clients to licensed lenders when specialized advice is needed. Rich Arzaga, founder of The Real Estate Whisperer, recommends referring clients to two or three mortgage brokers for refinancing or complex situations and monitoring clients’ existing rates and loan terms.

Advisors can include mortgage review in regular financial planning meetings and coordinate scenarios with CPAs and other professionals to consider tax effects and timing of financial milestones. The analysis of post-2022 loans reports $65 billion in annual excess interest and is cited alongside guidance on rate shopping, lender interviews and referrals.