A huge part of being a mortgage broker is being an advisor and mortgage
educator to my clients. This is especially true with first time home buyers. Buying your first home is an important decision
and some careful planning should go into it. After all it may take a couple
years to save up for the down payment or stabilize one’s career.
For example, I met with a couple last week whose goal was to buy in the
Chateauguay area in the next 3-5 years. Both are hard working salaried people.
The catch was that one had a bankruptcy and the other had a collection. First we
had to tackle the bankruptcy, meaning the client was discharged from bankruptcy
but had no new credit history. I advised that a secured credit card be opened
to start building credit history. As mentioned in previous blogs, the goal here
would be to establish two major trade lines, with limits of $1200 each and two
years of positive history with no late payments. In terms of my other client
with the collection, we had to ensure that the collection was paid off ASAP and
that she continues to pay the rest of her cards on time. It would not take long
for her credit score to bounce back. Ideally, once the collection is paid off
the banks like to see stable and no lates for a good 1-2 years as well.
This is a good example of mortgage planning and something that I will
monitor with these clients over the next several months. We need to ensure that
the secured credit card is reporting properly on the credit report. It will
take the clients’ at least two years to rebuild credit but fortunately they are
not in a rush as they also need to save up their down payment.
I welcome any mortgage questions or comments. Have a great week
everyone.
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