Mortgage Lending For The Professional Athlete
There is a misperception that all athletes are multi-millionaires and they can just pay cash for everything. They don't need to borrow money to buy a house, they can just pick the one they want and write a check. Not so.
Athletes are paid in some of the most complicated ways imaginable and it is very difficult for them to borrow money. Without the proper guidance from professionals it can be devastating to a player's wealth plan if they end up in the wrong mortgage. Let me help you understand some of the techniques used to help improve the possibility of an athlete getting a loan approved to buy a home.
You would think that being a professional athlete would allow you monetary advantages that the average Joe does not get. Lavish homes, exotic cars, vacations around the world and cash overflowing your wallet. Well get your head out of the clouds because all is not what it seems.
After years of late night practices, lifting weights to exhaustion and studying every technical nuance of your game, you have finally made it. You've made the final cut and have achieved your life long dream of becoming a professional athlete. Congratulations! Now you will be invited to all the parties, soon you'll be dating a supermodel and news of your sprained pinky finger will be headline news. Getting a home loan should be a piece of cake right? Wrong!
Huh?
The realities of life are about to hit you in the face. Your bank tells you that you don't qualify for a loan. "But I play for the (insert team name here)." "Why can't I get a loan?" Because you have no credit, bad credit, no job history, seasonal employment, you're contract is not guaranteed, you have no money in the bank, payment shock, or any other list of reasons the bank can come up with that make no sense to you. Well let me tell you something, the bank has made its decisions about lending money for years before you even picked up a pacifier let alone caught your first touchdown. And they will continue making loans long after you are retired and forgotten.
Listen, from a business standpoint, the bank has good reason to deny your loan request. You just got "hired" and there is no evidence of your income. You've got very little if any credit history and there is no way to determine if you will be a good customer or a flake. You just moved here from (enter your college town here), and the only history of paying your rent on time is provided by the school that had you on scholarship. Would you lend yourself money? Probably not. So what do you do? Well here's the answer.
The simple fact is that you need to understand some basic principals of business and employ a professional to help you secure a loan to buy the home you've always wanted. You don't need to sit on the sidelines waiting for a year to pass just so you can reap the benefits of home ownership. By the way, owning a home is probably the best move you can make in your first year of your professional career. Your CPA will tell you that you need tax deductions and one of the best ways for you to get them is through owning real estate.
There are banks that understand the professional athlete. You just need to know where to find them. Believe it or not, some of the best advice on who to trust is from other athletes who have been where you are. Most of them will have experience with a lender and believe me they would love to tell you about it. You can also ask the team's player development representative or your agent who they might recommend. If you still can't find a good referral then do an internet search for professional athlete mortgage loans. You will find people who have expertise in this field are out there. There are experts who can guide you through this process but let me give you some simple tips that will help you get started.
First, write a short biography. Put down on a single piece of paper a short description of your athletic accomplishments. Tell me how you got to this point and where you think your career will take you. Tell me why you think your team selected you. In this biography, list the people you have on your financial team. Your agent most likely set you up with a few financial planners to ประวัตินักกีฬา interview. List the names of the people you have spoken to or are speaking to and the amount of money you expect them to be managing for you. Don't forget to include what salary you expect to be paid by the team this year as well as any signing bonus you received and if you have any endorsements from corporate sponsors.
Second, provide some evidence. Lenders are always trying to mitigate risk. You need to give them reason to believe that you will pay them back. If you don't have a credit history, ask the power company or your cell phone company to provide a payment history to you. This will establish a record of how you have paid a creditor. Most of the time, these things don't reflect on a credit report, but a good lender will take these things into consideration.
Third, ask your agent to give you some historical background on a similar player who was drafted or signed last year. Like I said previously, a lender is looking for historical evidence to base a decision upon. If you can show that last year, the player drafted #79 overall was signed to a contract worth "X" amount for "X" years, you have established a baseline upon which a reasonable person can make an educated guess.
Fourth, get a recommendation from your coach. Both your former coach and your current team can write you a recommendation. With this, the lender will be able to make a character judgment. As your mother always told you, character matters.
Finally, be reasonable. It's never a good idea to try to purchase the most expensive property in the neighborhood. Think of your potential home as being a free agent. If your home is high priced, then you limit the number of people who can afford it. No different then if you are a free agent and you're asking for a contract that is at the top end of players in your profession. Only a select group of teams can afford you and therefore you limit the number of potential suitors. Real estate is the same. If your home is really expensive, then it will take longer to sell when you move. The sports industry is one where careers are generally short and odds are that you will move within 5 years. Don't put yourself or the bank in a position where it will be difficult to unload your property. This will help you in the long run.
