Ready to See a Lender? Don’t Wait!
Many clients tell me they are waiting until they are “ready” before they go see a lender. When I ask how they will know they are ready, or what ready means to them, the answer is often vague. My advice 100% of the time is go see a lender long before you think you are ready to buy a home.
See the Lender to Get Ready
Which Debts to Pay First
Homebuyers, especially first time homebuyers, should see a lender long before they go house hunting. A good lender will look at all the debts which have accumulated and set a plan for which ones to pay down first. Here’s the thing, it’s not just paying down debt to get ready for home ownership, but knowing which ones will improve your credit score the fastest.
Little or No Credit
Or let’s say the future homebuyer has no credit history, or not enough credit. A good lender will help identify which types of credit will help build credit quickly. Of course the first thing which helps build credit is to ALWAYS pay the bills and pay them ON TIME!
Being ready for a home loan isn’t only about having decent credit. For some homebuyers the type of work they do will impact how and when they will be ready for a home loan. For those with a regular job and a steady consistent paycheck, it’s easier to show the income will be there to make the mortgage payment. However, lots of people have jobs which are seasonal, or have fairly low pay plus a regular bonus, or they are self-employed. Having this type of income makes it a little harder for the lender to see how a home mortgage payment will get paid on time, every month. Lenders can offer advice on how to document things like bonuses.
A good lender will provide a client with budgeting tools. Many of us, me included, have a rough idea where our money goes. Actually tracking the money with a budget will help see opportunities for saving money for a down payment. There are often some budget leaks. For example a couple of coffees a day, or streaming services which are not used much. Eliminating a few things could provide significant savings.
Ask for Recommendations
How do you find a good lender? Ask for recommendations! Check with friends about which lender they used and if they would use them again. Ask people at work, or people whom you admire. Talk to a Realtor, we know LOTS of lenders! Most importantly do it now! Don’t wait until you are “ready.” Let a lender help get you ready sooner!