How to Use a CMPS to Get a Better Home Mortgage Loan
How to Use a CMPS to Get a Better Home Mortgage Loan Skip to content
Motley Fool Stock Advisor recommendations have an average return of 397%. For $79 (or just $1.52 per week), join more than 1 million members and don't miss their upcoming stock picks. 30 day money-back guarantee. Sign Up Now CMPSs must also adhere to the code of ethics that is prescribed by the CMPS Institute, which includes the following tenets: Speed and efficiency in loan approval and processingUse of mortgage products and structure of loans that meet clients’ needs and expectationsClear communication with clients about all aspects of the loan processHonesty in all transactions and business dealingsFull disclosure of all fees and costs associated with the mortgageComplete confidentiality with all client informationDisclosure of any possible conflict of interest to the clientDisclosure of any additional fees, compensation, or other remuneration for the CMPS if he or she recommends other types of products or services to the client, such as investments, insurance, or financial planningNo discrimination based on race, ethnicity, gender, age, religion, handicap, or other such qualifying characteristicsNo false or misleading statements about themselves, their businesses, or competitors Failure to comply with the code of ethics can result in disciplinary action by the institute, such as the suspension or revocation of the designation.
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By Mark Cussen Date January 23, 2022FEATURED PROMOTION
Prospective homeowners today have many options when it comes to getting a home loan. Banks, credit unions, mortgage brokers, and many financial planners now offer a range of products that can be used to purchase or refinance a home. But not all loan officers are created equal. Some have taken the time to become Certified Mortgage Planning Specialists (CMPS), which effectively sets them apart from their competition in terms of education and expertise.What Is a CMPS
Certified Mortgage Planning Specialists are loan officers and brokers who have completed the requirements to carry the CMPS designation. They have completed 15 hours of coursework with exams that cover all of the major aspects of mortgage lending, including: Mortgage-Related Tax Deductions. A CMPS can show clients how to structure a mortgage so as to provide the maximum possible tax benefit, such as by paying discount points up front (a “point” equals 1% of the loan amount). If the loan is for the purchase of a home, then the entire amount of any discount points paid can be deducted for that year (points paid for refinancing must be prorated over the life of the loan). This additional amount may be enough to allow the client to itemize their tax deductions for that year, and thereby reduce the amount of tax that they owe in a way that they could not otherwise.Financial and Housing Markets. CMPS originators possess an understanding of how general economic conditions affect the housing market and how this impacts the client. If the housing market is in a decline, then a CMPS could explain to a client how the value of their home may not rise for a period of time after purchase, and thus may not be a wise investment in some cases.Advanced Cash Flow Concepts. CMPS originators are able to integrate mortgage debt into the client’s financial plan, taking into account such factors as retirement, college planning, and the client’s budget. They are therefore more adept at being able to help clients understand how much home they can afford because they can look beyond the standard financial ratios and formulas that are used to calculate this amount. They can help a client to see the true impact of having a higher mortgage payment versus funding college or retirement accounts.Real Estate Investment Planning. This involves working with sophisticated borrowers and investors to achieve high-end financial objectives. For example, a CMPS could show someone who is retiring from the rental property business how to exchange all of their rental properties for a share of a single commercial property that generates an equivalent amount of income without the responsibilities of being a landlord. This can be done under Section 1031 of the Internal Revenue Code that allows a taxpayer to exchange certain types of similar property (such as individual rental properties for commercial real estate) without having to pay tax on the sale of the properties that are currently held. As with most other professional designees, CMPSs must stay abreast of new developments in their business. The institute requires them to complete at least four hours of approved continuing education (CE) coursework each year, in addition to the eight hours of mandatory CE that they must complete in order to keep their licenses current, for a total of 12 hours of CE per year.Motley Fool Stock Advisor recommendations have an average return of 397%. For $79 (or just $1.52 per week), join more than 1 million members and don't miss their upcoming stock picks. 30 day money-back guarantee. Sign Up Now CMPSs must also adhere to the code of ethics that is prescribed by the CMPS Institute, which includes the following tenets: Speed and efficiency in loan approval and processingUse of mortgage products and structure of loans that meet clients’ needs and expectationsClear communication with clients about all aspects of the loan processHonesty in all transactions and business dealingsFull disclosure of all fees and costs associated with the mortgageComplete confidentiality with all client informationDisclosure of any possible conflict of interest to the clientDisclosure of any additional fees, compensation, or other remuneration for the CMPS if he or she recommends other types of products or services to the client, such as investments, insurance, or financial planningNo discrimination based on race, ethnicity, gender, age, religion, handicap, or other such qualifying characteristicsNo false or misleading statements about themselves, their businesses, or competitors Failure to comply with the code of ethics can result in disciplinary action by the institute, such as the suspension or revocation of the designation.