Answers From the Lenders
Occasionally, I receive questions from my websites about the process of financing, selling or buying a home. I welcome these questions and diligently seek to find competent professionals to answer these questions. This week s question was presented to three lenders for an answer.
The Question:
How many prequalification applications can I submit, and will it affect my credit rating?
Answers from the Indianapolis Home Mortgage Specialists:
The rule is that 'like credit pulls' with in a 30 day period only count as one pull. So if I applied for a Home loan with 4 places and they all pulled my credit with in 30 days it would only count as one, however if I applied for a Home loan, a car loan, and 90 days same as cash on furniture that is three different pulls. The Action Team Matt Gunning Sales / Realtor Relations Countrywide Bank, FSB matt_gunning@countrywide.com
As far as limits to the number of times you can apply for a mortgage, no limits exist. Applying for a mortgage does not lower your credit. What can lower your credit score is having your credit report pulled over and over again. You do not have to do a formal pre-approval with every mortgage company you contact. You can have one mortgage company pre-approve you and call other mortgage companies for rate quotes and estimate of closing costs.
If they tell you they need to pull your credit, tell them you are not ready to do that at this time and give them an idea of your median credit score (once you are pre-approved make sure to ask the lender what your three credits scores are on your credit report - lenders go off the middle score). Rates are based on credit scores so a lender will need to have an idea of your credit score and how much you plan to put down on a purchase in order to give you an accurate rate quote. Amy K. Trusty Relationship Manager First Horizon Home Loans Aktrusty@fhhlc.com
Everytime you submit a loan application your credit is pulled. From the time the first credit inquiry is pulled for mortgage purposes your credit can be pulled multiple times during a 30 day period without affecting your credit score as long as all the inquires are only for the purpose of obtaining a mortgage. The situation that borrower's get into when applying for a home loan with multiple companies is that they do not always know exactly the first date their credit is pulled nor do the companies always disclose the exact number of times they pass your information along to investors who also pull your credit.
They just tell you they will have several companies competing for your loan and give you the best pricing. When this happens, your credit will be pulled multiple times and may or may not be during the window of time that is allowed to have it pulled multiple times. If the company is a direct lender they have an agreement with their investors to use their credit report and your credit is only pulled once.
Therefore, it is important to know the type of company you are giving your personal information to when applying for a home loan. Perfect Mortgage is a direct lender and works with clients to find the best home loan with the best pricing that fit their financial needs. Tauscha Snyder Mortgage Banker PERFECT MORTGAGE tsnyder@perfectmortgage.com
Remember, if you have questions about real estate or financing, I have a team of professionals ready to provide answers.
Discussion
Karl - You are so right! There are so many aspects to buying and selling a home - an agent can not be expected to know everything. The experts in their respective fields are the best ones to answer questions like this.
Have a great day, Karl!
Paula, Great post. Many consumers don't know these things, and it is great to include different comments from mortgage experts to more thoroughly cover the answers, as opinions may vary a little. I'm talking to a local mortgage broker about writing for my blog sometimes. It's great to get input from people in the business since we can't be experts on everything.
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