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Purchasing or Renovating Your Home

Purchasing or Renovating Your Home

Important financing strategies to consider

The peak home buying season is in full swing for both primary and secondary residences. Whether buying or renovating, determining the best financing solution for your unique situation is a critically important decision.  Morgan Stanley’s experience in working with clients is that engaging in a planning discussion in advance of the purchase decision can result in better outcomes.

Important Planning Considerations Ahead of Your Home Purchase and Financing Decision

  • Have you considered the rent vs. buy decision? Or, whether this is the right time in the market cycle to be buying a new home?
  • How long do you plan to own your home?
  • If you are in the market for a new home, have you considered obtaining a pre-approval letter1 to size the amount of your loan and your purchase price and to expedite the loan processing time?
  • If you can take advantage of a lower price with an all-cash offer or if you are facing a quick-close requirement, have you considered a securities based loan to facilitate the acquisition? Do you have a restricted or concentrated stock position that you may want to use as collateral?
  • Should you consider an adjustable rate or a fixed rate mortgage?
  • Do you have a need for liquidity to fund your down payment or to fund your home improvements and new furnishings? Would you prefer to keep your portfolio intact to avoid potential tax consequences2 and transaction costs?
  • Have you considered the benefits of consolidating your financial relationship with Morgan Stanley to potentially obtain better pricing for yourself or a family member?3
  • Are you certain that your bank has the expertise to evaluate the complexity of your financial situation to ensure you are afforded the best possible solutions?

There are risks associated with using your assets as collateral for a securities based loan, including possible margin calls on short notice. As with all investment strategies, those involving the use of leverage present risks that must be considered. For details please see the important disclosures below.

Planning Ahead of Your Liquidity Needs

We have found that our clients often benefit from a more holistic approach in liability management.  A strategic use of suitable debt can strengthen an individual’s ability to meet personal goals and be ready to take advantage of opportunities when they arise —such as when your dream house suddenly goes on the market or you finally decide to create your dream kitchen.

The Right People to Help You Make the Right Choice

Whenever you are faced with a liquidity need, or personal financial goal, understanding the strategic options available to you is crucial. Morgan Stanley Financial Advisors partner with a dedicated Private Banker who is experienced in assisting clients with unique and complex income streams. This Private Banker provides guidance at every step of the process - from helping you select the right residential mortgage solution to navigating you through the loan origination process of traditional mortgages and securities based loans.

If you are interested in learning more about home financing options, or would like to set up a comprehensive liability review, please contact your Financial Advisor who will introduce you to a Private Banker.

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