Author Topic: Multiple mortgage pre-approvals and their effect on your credit  (Read 1230 times)

pinkfloyd4ever

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Multiple mortgage pre-approvals and their effect on your credit
« on: January 12, 2017, 09:57:51 AM »
Is it true that getting several pre-approvals within a short time span (30-45 days) doesn't hurt your credit more than 1 pre-approval?  And how much do rates vary between different bancks, credit unions, etc? I've seen some people recommend getting one pre-approval, then when you find a house you want, you can get quotes from other banks/CUs. Is there a Mustachian-preferred way to rate-shop?

A little background: We currently rent a SF. We're in the early stages of our search for a duplex that we plan to live in one half of while renting out the other half. We'd much prefer a side-by-side duplex over an over-under, but over-unders are far more common in the areas we're considering. So it could be a while before the right one comes up for sale. So, to that point, how long are pre-approvals usually good for?

MetalCap

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Re: Multiple mortgage pre-approvals and their effect on your credit
« Reply #1 on: January 12, 2017, 10:00:55 AM »
Pre-approvals might hurt your score with too many but not enough to affect your rates.  You might see a dip of 10 points or less, and that shouldn't change the banks' opinions of your credit worthiness.

Pre-approvals are usually good for 3-6 months depending on the bank and if interest rates have changed.  Usually a good local banker will work with you and give you a timeframe.

pinkfloyd4ever

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Re: Multiple mortgage pre-approvals and their effect on your credit
« Reply #2 on: January 12, 2017, 10:08:28 AM »
Thanks MetalCap.

Is there value in talking to a lender without getting a pre-approval?

MetalCap

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Re: Multiple mortgage pre-approvals and their effect on your credit
« Reply #3 on: January 12, 2017, 11:02:33 AM »
After talking with 2-3 lenders, the value is pretty low when doing conventional financing.  You'll see the same rate and down payment requirements from the lenders.

More aggressive research and discussions with lenders are only valuable when pursuing a portfolio loan to wrap up multiple properties.  That's where there could be a decent amount of disparity.

Another Reader

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Re: Multiple mortgage pre-approvals and their effect on your credit
« Reply #4 on: January 12, 2017, 12:37:18 PM »
In your shoes, I would shop several lenders and get a pre-approval from the lender with the best terms.  You can shop again when you are ready to buy.

omega13

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Re: Multiple mortgage pre-approvals and their effect on your credit
« Reply #5 on: January 21, 2017, 02:04:56 AM »
From my experience with new mortgages and refinancing, when you have one lender pull your credit, subsequent mortgage credit inquiries will be considered as related and not ding your credit for the next 30 days.

I always ask the lenders that question. Usually the first pull is a hard pull, the rest, within the 30 day period, tend to be soft pulls.