Are you still a few years away from buying a home? Here's why you shouldn't wait to talk to a lender

Most people begin their homebuying journey once they've saved up enough money for a down payment. The rest of the process typically entails speaking to a lender, getting pre-approved for a home loan, working with a real estate agent to find a place that's right for you, making an offer, conducting inspections and eventually closing on the property.

According to Nicole Rueth, senior vice president at the Fairway Independent Mortgage Corporation, potential homebuyers should start speaking to lenders long before they're ready to buy a home instead of waiting until they have enough money to make a down payment.

"The moment you think about buying a home is when you should be talking to a lender," Rueth says. "You don't have to already be in the process of buying a home to do this. You can be two years away from buying a home and still start that conversation."

By having that conversation early on — even if you're still a few years away from buying a home — you'll be able to get your lender's input on what you'll need to do over the next few years to afford the kind of house you want to buy.

"Maybe you find that you'll need to get a higher paying job to afford the house, or maybe you're told you need to work on paying down more of your debts or fight off a negative trade line on your credit report," Rueth explains. "This will be the homework you have to work on after your meeting with a lender."

Working with a lender ahead of time can also provide a clearer picture as to what else you'll need to budget for — after all, a down payment is just one of several upfront costs you'll need to be prepared to pay when you're finally ready to buy a home. For instance, you'll need to account for lender fees — charges associated with processing, approving and funding your loan, which can wind up being 1% to 2% of your loan amount — as well as additional fees for appraisal, inspection and title insurance.

Rueth recommends starting with the people and institutions you trust when trying to find a lender.

"I would check in with the people you trust. Don't just ask your friends who they got their mortgage from, ask your financially savvy friends who they went with," Rueth says. "You want to take advice from the right people."

Another good place to get the homeowner conversation started is your favorite local bank. Rueth suggests working with a lender that already provides resources to instruct and inform potential borrowers about the homebuying process, which shows they believe in spending the time to educate others.

A quick search on a mortgage lender's website can help you learn what kinds of educational resources are offered. Chase Bank has a great podcast series called "Beginner to Buyer" that's aimed at helping customers familiarize themselves with the homebuying process, while PNC Bank has an online first-time homebuyer's guide, which includes access to an online affordability calculator.

You can also do research on your own with the help of websites that cover mortgage lenders. Select has rounded up and ranked the best mortgage providers for a number of situations, including the best mortgages for those who want to make a small down payment to the best mortgages for those with a low credit score.

"A good lender will spend the time with you even if you're not ready to buy a home today," Rueth explains. "The conversation today will better position you down the line to reach that goal of homeownership."

Even if you're a couple of years away from being ready to buy a home, it can still be beneficial to sit down with a lender and talk things out. The conversation can help you figure out what the next 12 to 24 months should look like in terms of getting financially ready to buy a place.

"Anyone who doesn't think they can purchase a home right now needs to figure out the path to ownership," Rueth says. "It's never a 'no,' but it may just be a 'not right now.'" In other words, early conversations with a lender can help you close the gap between "not right now" and owning a home.

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