I was perusing the pages of REMonline.com (An online magazine for REALTORS®) and I came across an article called "Good Credit vs Bad Credit" To sum up the article, the author stresses the importance of having good credit in order to purchase a property. All in all I find this to be a well written, informative article. However although I like where she was going with it, I am not so sure I like where she ended up.
There are a couple finer points in the details that I figured should be addressed like: What information is reported to the credit bureau & Should you pull your own credit report?
So I decided to record a short audio clip, you can listen to here:
From Credit to Advice
I know this is subtle, but I have to address it. In this article the author is writing with the REALTOR® as her target audience, not the average first time home buyer. I took the premise of her article anyway and used it to share some information with you about credit reports. However, that isn't at all where I am going with this...
The very reason we write this blog and have a website is to educate our clients (you). Our goal is to be your financial resource and provide you with valuable information to assist you in making the best financial decisions for you and your family. We work diligently and take pride in our work.
So when the author of this article on REMonline tells REALTORS® to "Encourage your customers to review their own credit report and score before applying for a loan. This will allow them to uncover any errors or signs of fraud." I can agree with the premise of what she is saying "make sure your client is informed about their financial situation and understands where they stand with respect to their credit" but I strongly disagree with her endorsement of the REALTOR® as a person who should be giving financial advice.
So let me go on the record here (and yes I am about to quote myself):
"Just as you shouldn't take Real Estate advice from your Mortgage Professional, Don't take Mortgage Advice from your Real Estate Professional". @kiltedbroker
If you are looking for information or advice on the mortgage process, mortgage products, term, rate, financing options, credit, downpayment sources, financial market trends, strategies to pay down your mortgage faster or anything else mortgage finance related... Please, please talk with your mortgage professional.
If you are looking for information or advice on buying real estate, choosing a single family home, duplex, detached or condo, neighbourhoods, market trends, market values, emerging neighbourhoods, amenities, schools or anything else property or real estate related... Please, please talk with your REALTOR®.
No one person should give both Real Estate & Mortgage Advice. If someone tries that on you... don't trust them!
So let's bring it back to the article that started this discussion and answer the question that the author didn't ask. Where is the best place to start the home buying process? Well, if it starts with understanding your credit report (as she suggests), then the best place to start is to find a mortgage professional that will assist you through a mortgage preapproval. I have conveniently placed a link to our contact page here... just in case, you know...
Anyway, often times I will answer questions on a site called Klout. I think my answer to this question is rather fitting to this conversation.
To answer the question another way, the top thing you should consider when buying your first home is: Who will you trust to represent you? The goal has to be to bring together a team of professionals to educate you in their specific areas of expertise. Ask good questions and make decisions when you understand the options available to you. Education is key.
As important as rate, term or amortization, as important as neighbourhood, property type or market trends...
"Choosing the professionals you work with is one of the most important decisions in the home buying process." Jackson Middleton
(I just quoted myself again) So how do you pick your professionals? Well, that sounds like something I should write about... Stay Tuned (whatever that means).
Anyway, I will leave you with this: "I believe that people should do business with people they know, like and trust. Sometimes its hard work just finding these people, but it's well worth it when they do."