My kids ask great questions -- I wonder where they learned it from! This time, they asked me at what point in the home buying process should they start talking to a mortgage broker?
The ideal point that someone should be talking to a mortgage broker, is at least a year before you realize you want to buy a house.
Why a year? This gives you lots of time to correct any mistakes you might find on your credit report, save for a down payment or pay off some debt to put you in the best financial position for buying your first home.
A Year to Fix One Missed Payment
I once had a client that had one missed payment on a credit card recorded on their credit report. And just that one missed payment, even though the client had great credit payment history otherwise, reduced their credit score by just enough that they were out of qualifying range for a mortgage. One payment!
It took us a couple of months to work with the credit bureaus to figure out this situation and put a plan together for the client to build a great credit score. This was where having the extra time on our side worked out!
Set a Realistic Timeframe
Now, realistically, starting your home buying journey a year in advance isn’t likely going to happen. It would be fantastic to have a year to plan, but in our world, it’s just not always possible.
The most realistic timeframe to start talking with a mortgage broker about buying your first home is at least six months in advance.
This period generally allows enough time to set proper expectations as to what you can afford, and allow you some time to adjust and fix any shortcomings that you may have financially.
How I Can Help My Kids (And You!)
I told my kids this;
The moment you start thinking about buying a home is the moment you should reach out to a mortgage broker.
Even if you’re not ready for that mortgage yet, a mortgage broker can help you put together a plan to help you figure out which debts to pay off first, and share practical tips on increasing your credit score. You would be surprised how easy increasing your score can be!
In a way, my kids already have a head start in knowing what they need to do when they’re ready to buy a home. And, I’ll be there to help them every step of the way (if they want me, of course!)
If you’re looking to learn more about buying your first home in Calgary or the surrounding area, I love sharing my 30+ years of knowledge and experience to anyone in need.